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Task 2 Weight 40 points Gramn Miljevekst AS (GMV) is currently considering a two-year project which, if implemented will result in an investment outlay of

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Task 2 Weight 40 points Gramn Miljevekst AS (GMV) is currently considering a two-year project which, if implemented will result in an investment outlay of 2.700. In real quantities (values) is expected the cash flow payments in year 1 and your 2 to amount to 3,000 and 4,000 respectively. Equivalent cash Mow payments are assumed to amount to 1,500 and 2,200 respectively in year 1 and year 2. The project amortized on a straight-line basis to a book value equal to zero during the two-year period. in the accounting and finance department at GMV, it is discussed whether the project should be budgeted in nominal terms or real amounts of money. CFO Andersen believes that the choice affects estimated profitability, ie. both net present value and internal rate of return. Budgeted in nominal sizes (values) requires GMV 12 20% return after tax of the project. Inflation over the two-year period is expected to be 10% pr year. The project's tax rate is 25% Show carefully how to calculate the answers to the questions below Calculate GMV's rool return requirements for the project (6) 10p Calculate the project's tot present value measured in real money value

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