Question: Given the following data for Project M: Cash Flow in real terms C 0 = -200, C 1 = 150, C 2 = 120 Real

Given the following data for Project M:

Cash Flow in real terms C0= -200, C1= 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?

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