Question: Problem 6-5 Real and nominal flows Mr. Art Deco will be paid $210,000 one year hence. This is a nominal flow, which he discounts at

Problem 6-5 Real and nominal flows Mr. Art Deco will be

Problem 6-5 Real and nominal flows Mr. Art Deco will be paid $210,000 one year hence. This is a nominal flow, which he discounts at an 9% nominal discount rate: PV = $210,000 / 1.09 = $192,661 The inflation rate is 2%. Calculate the PV of Mr. Deco's payment using the equivalent real cash flow and real discount rate. (Do not round intermediate calculations. Round your "Real cash flow" and "Present value" answers to the nearest whole dollar amount. Enter the "Real discount rate" as a percent rounded to 3 decimal places.) Real cash flow Real discount rate Present value

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