A Project Anticipates Net Cash Flows of $10,000 at the End

question 24

Multiple Choice

A project anticipates net cash flows of $10,000 at the end of year 1,with such amount growing at the expected 5% rate of inflation over the subsequent 4 years.Calculate the real present value of this 5-year cash stream if the firm employs a nominal discount rate of 15%.

• A) $33,522
• B) $38,377
• C) $43,294
• D) $55,000

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