Question: Please help 2. A coal mining company is considering whether to invest in some new equipment. The net present value of the equipment depends in

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Please help 2. A coal mining company is considering whether to invest

2. A coal mining company is considering whether to invest in some new equipment. The net present value of the equipment depends in large part on the value of additional coal the equipment is expected to produce. a. Calculate the PV of a ton of coal received one year from now; assuming the following: the nominal interest rate = 8%; the expected ination rate = 6%; the expected growth rate in price of coal = 2%; and the current price of coal is $25/ton. b. Does it matter whether you use the nominal or the real interest rate? Explain

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