You must value a perpetual lease. It will cost

$100,000 each year in real terms—that is, its proceeds will not grow in real terms, but just contractually keep pace with inflation. The prevailing interest rate is 8% per year, and the inflation rate is 2% per year forever. The first cash flow of your project next year is $100,000 quoted in today’s real dollars.What is the PV of the project? (Warning: Watch the timing and amount of your first payment.)