Question: 1. (7 points) Given the following data for Project M: Cash Flow in real terms Co=-200, C= 150, C2 = 120 Real Discount rate =5%

1. (7 points) Given the following data for Project M: Cash

1. (7 points) Given the following data for Project M: Cash Flow in real terms Co=-200, C= 150, C2 = 120 Real Discount rate =5% Nominal Discount Rate = 10% Calculate NPV. How much the NPV would change, if you used nominal discount rate and nominal cash flows instead of real ones? (Use the same cash flows amount for nominal)

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