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The following table shows a cash flow schedule for an investment opportunity. (Q12-13) Annual Year CPI nominal cash flow 0 100 -$130,000 1 103.5 -$45,000

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The following table shows a cash flow schedule for an investment opportunity. (Q12-13) Annual Year CPI nominal cash flow 0 100 -$130,000 1 103.5 -$45,000 2 107.12 -$10,000 3 110.87 $220,000 Compute the annual inflation rate. O A. 2% O B. 3% C. 3.5% D. 4% O E. 4.5% Use the table in Q12 to answer the following question: What is the correct value for the real IRR? If the nominal discount rate is 5%, should the firm take this project? A. Real IRR = 6.73%; Yes, the firm should take the project. B. Real IRR = 6.73%; No, the firm shouldn't take the project. C. Real IRR = 3.12%; No, the firm shouldn't take the project. D. Real IRR = 3.12%; Yes, the firm should take the project. E. Real IRR = 2.31%; No, the firm shouldn't take the project. F. Real IRR = 2.31%; Yes, the firm should take the project

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