What is the real rate of interest for a risk free one year, Financial Management

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What is the real rate of interest for a risk free one year

1. If inflation is expected to be 3 percent during the next year, while the nominal rate of interest for a one year loan is 7 percent then what is the real rate of interest for a risk free one year loan?

2. Miles Cyprus Corp. purchased a truck that currently has a book value of $1,000. If the firm sells the truck for $5,000 today then what is the amount of cash that it will net after taxes if the firm is subject to a 40 percent marginal tax rate?

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