! Required information Exercise 16-38 & 16-39 Inflation and Capital Budgeting (Appendix B) (LO 16-10) [The following information applies to the questions displayed below.] The state's Secretary of Education is considering the purchase of a new computer for $100,000. A cost study indicates that the new computer should save the Department of Education $30,000, measured in real dollars, during each of the next eight years. The real interest rate is 20 percent and the inflation rate is 10 percent. As a governmental agency, the Department of Education pays no taxes. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Exercise 16-39 Part 2 2. Prepare a schedule of cash flows measured in nominal dollars. Use a nominal discount rate equal to the nominal interest rate. (Negative amounts should be indicated by a minus sign. Round the "Price Index" to 4 decimal places, the "Discount Factor" to 3 decimal places, and other answers to the nearest dollar amount.) Year Cash Flow in Real Dollars Price Index Cash Flow in Nominal Dollars Discount Factor Present Value 0 1 2 3 +4 5 6 7 8