Estimating the present discounted value of the profits

Reference no: EM131160847

For which of the problems listed in (a) through (c) would you want to use real payments and real interest rates, and for which would you want to use nominal payments and nominal interest rates to compute the expected present discounted value? In each case, explain why.

a. Estimating the present discounted value of the profits from an investment in a new machine.

b. Estimating the present value of a 20-year U.S. government bond.

c. Deciding whether to lease or buy a car.

Reference no: EM131160847

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