($ thousands)
Period
	0	1	2	3	4	5	6	7
Net cash flow	13,600	1,584	3,047	6,423	10,634	10,085	5,857	3,369
Present value at 20%	13,600	1,320	2,116	3,717	5,128	4,053	1,961	940
Net present value =	2,996	(sum of PV's)

Restate the above net cash flows in real terms. Discount the restated cash flows at a real discount rate. Assume a 20% nominal rate and 10% expected inflation. NPV should be unchanged at +2,996, or $2,996,000.