Question: Given the following data for Project M calculate the NPV of the project. C0 C1 C2 Cash flow in nominal terms: 100 75 60 Real

Given the following data for Project M calculate the NPV of the project.

 C0C1C2
Cash flow in nominal terms:−1007560
Real discount rate = 5%   
Inflation rate = 4%   
  • Calculate the discount rate assuming there is no risk. 
  • Calculate the NPV of this project applying the discount rate calculated in above question. 

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