What is the present value cost

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Reference no: EM132062665

Inflation and NPV

a) If the inflation rate was 4.5% and the rate of the interest is 5% in 2011, what was the nominal rate of interest for 2011?

b) You own a lease that will cost you $10,000 this year, increasing at 4.5% a year (the forecasted inflation rate) for 3 additional years (with four payments in total). The lease payment will be made in the beginning of the years. If the real rates are 5%, what is the present value cost

Reference no: EM132062665

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