You have estimated a project's cash flows as: Year 0 1 2 3 4 5 Cash Flow (2,400) 1,140 1,140 1,140 1.140 1,140 Cost of capital 9% Suppose you compute the NPV. But wait-your assistant asks if you remembered inflation. You didn't, and so decide to mark up the cash flows by this rate: 7% Specifically, you decide the inflow for year 1 is accurate. However, you believe each following inflow should be adjusted up (growing at the estimated inflation rate). You consider the Fisher equation, and suppose the cost of capital already reflects inflation (so, no adjustment necessary). B You re-compute your NPV using the new cash flows. How much has your NPV increased 1 A Between 200 and 550 2 B Between 550 and 630 3 C Between 630 and 730 4 D Between 730 and 990