($ thousands)

Period

0 1 2 3 4 5 6 7

Net cash flow 14,000 1,624 3,087 6,463 10,674 10,125 5,897 3,409

Present value at 22% 14,000 1,331 2,074 3,559 4,818 3,746 1,788 847

Net present value = 1,502 (sum of PVs)

Restate the above net cash flows in real terms. Discount the restated cash flows at a real discount rate. Assume a 22% nominal rate and 8% expected inflation. NPV should be unchanged at +1,502, or $1,502,000. (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest whole number.)

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Net cash flows (real)

Net present value $