| ($ thousands) |
| Period |
|
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
| Net cash flow |
-14,500 |
-1,674 |
3,137 |
6,513 |
10,724 |
10,175 |
5,947 |
3,459 |
| Present value at 22% |
-14,500 |
-1,372 |
2,108 |
3,587 |
4,841 |
3,765 |
1,804 |
860 |
| Net present value = |
1,091 |
(sum of PVs) |
|
|
|
|
|
|
Restate the above net cash flows in real terms. Discount the restated cash flows at a real discount rate. Assume a 22%nominal rate and 8% expected inflation. NPV should be unchanged at +1,091, or $1,091,000.
(Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest whole number.)
|
Year 0 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Year 6 |
Year 7 |
| Net cash flows (real) |
|
|
|
|
|
|
|
|
| Net present value |
$ |
|
|
|
|
|
|
|
|