Problem
Now assume that the sales price will increase by the 4 percent inflation rate beginning after Year 0. However, cach operating costs will increase by only 2 percent annually from the initial cost estimate, because over half of the costs are either depreciation or are fixed by long-term contracts. For simplicity, assume that no other cash flows (net cannibalization costs, salvage value, or net working capital) are affected by inflation. Find the project's NPV. IR.R., MIRR, AR.R, and payback with inflation taken into account.