Your municipality is planning the construction of a new sports complex on January 1, 2018 (Yes construction is almost instantaneous!!). You've requested by the municipal council to explain the relationship between the project actual and constant dollar flows for the project. The projected annual inflation rate is 3%. The nominal (with inflation) interest rate is 5%. Actual cash flows are fully sensitive to inflation (i.e., they increase at the same rate as inflation). Projected Cash Flows Cash Flows in January 1, 2018 dollars Cash Flows in Actual Dollars Initial Investment on January 1, 2018 AA 50,000 20,000 EOY: 2018 2019 2020 2021 2022 CC DD 64. What is the dollar value of BB (to the nearest $100)? a) 19,400; b) 20,000; c) 21,200 65. What is the dollar value of CC? a) 20,000(P/F, inflation rate, 1); b) 20,000(F/P, inflation rate,3) c) 20,000(P/F,real MARR, 1); d) 20,000 66. What is the dollar value of DD? a) 19,400; b) 20,000; c) 22,500 Answers are below. Please show the steps to obtaining them thanks! 64) A 65) B 66) A Your municipality is planning the construction of a new sports complex on January 1, 2018 (Yes construction is almost instantaneous!!). You've requested by the municipal council to explain the relationship between the project actual and constant dollar flows for the project. The projected annual inflation rate is 3%. The nominal (with inflation) interest rate is 5%. Actual cash flows are fully sensitive to inflation (i.e., they increase at the same rate as inflation). Projected Cash Flows Cash Flows in January 1, 2018 dollars Cash Flows in Actual Dollars Initial Investment on January 1, 2018 AA 50,000 20,000 EOY: 2018 2019 2020 2021 2022 CC DD 64. What is the dollar value of BB (to the nearest $100)? a) 19,400; b) 20,000; c) 21,200 65. What is the dollar value of CC? a) 20,000(P/F, inflation rate, 1); b) 20,000(F/P, inflation rate,3) c) 20,000(P/F,real MARR, 1); d) 20,000 66. What is the dollar value of DD? a) 19,400; b) 20,000; c) 22,500 Answers are below. Please show the steps to obtaining them thanks! 64) A 65) B 66) A