Question: ABC Co. is considering the following two mutually exclusive projects. The cash flows for project A are expressed in real terms, while those of project

ABC Co. is considering the following two mutually exclusive projects. The cash flows for project A are expressed in real terms, while those of project B are expressed in nominal terms. The appropriate nominal discount rate is 8% and the inflation rate is 2%. Using the exact Fisher equation, calculate the real discount rate. (Enter percentages as decimals and round to 4 decimals).

Year: 0 1 2 3 4

Project A: -55000, 22000, 43000, 15000

Project B: -68000, 34000, 37000, 25000

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