Arya Co. is considering the following two independent projects. The cash flows for Project A are expressed in nominal terms, while Project B's are expressed in real terms. The appropriate nominal discount rate is 11%, and the inflation rate is 5%. Using the exact Fisher equation, calculate the real discount rate. (Enter percentages as decimals and round to 4 decimals). Using the exact Fisher equation, calculate net present value for Project A. (Round to 2 decimals)

Year	Project A	Project B
0	-160,000	-109,000
1	60,000	40,000
2	60,000	40,000
3	60,000	40,000
4	60,000	40,000
5	60,000	40,000

Answer rating: 100% (QA)

To calculate the real discount rate using the exact Fisher equation we can use the following formula ... View the full answer