Question: ( Inflation - protected contract ) You are considering an investment opportunity. It requires you to pay $ 2 0 , 0 0 0 as

(Inflation-protected contract) You are considering an investment opportunity. It requires you to pay $20,000 as an initial investment and will pay $5,000 for the next five years. If you think the proper discount rate for this project is 7%, and you expect the inflation rate would be 2% per year.
What is the inflation-protected nominal interest rate?
What would be the PV of this project?
Will you take on the project?
(Inflation-protected contract) You are considering an investment opportunity. It requires you

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