(a) Determine the average annual general inflation rate over the project period.

(b) Convert the cash flows in actual dollars into equivalent cost dollars with year 0 as the bae year

(c) If the annual inflation-free interst rate is 5%, what is the present worth of the cash flow?

Consider the following project's after-tax cash flow and the expected annual general inflation rate during the project period Expected General Inflation Rate Cash Flow End of Year (In Actual S) $50,000 35,000 35,000 35,000 0 3.3 % 3.9 5.3 2