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Corporate Finance - Inflation and NPV

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Why is it true, in general, that a failure to adjust expected cash flows for expected inflation biases the calculated NPV downward?

Explain how net operating working capital is recovered at the end of a project’s life, and why it is included in a capital budget analysis.

Define (a) simulation analysis, (b) scenario analysis, and (c) sensitivity analysis.
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The solution includes detailed discussions on the three questions asked. The statements are critically analyzed and an in depth view is presented.
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