Formatting Table Clear filter. Select Number Styles Cells F M N O Q R S U 19. Capital Budgeting with Inflation Consider the following cash flows on two mutually exclusive projects: Year Project A Project B -$82,000 0 -S73,000 sh VS B 1 35,500 37,600 2 38.900 49.300 3 26.000 35.500 The cash flows of Project A are expressed in real terms while those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 11 percent and the inflation rate is 4 percent. Which project should you choose