Your consulting firm will produce cash flows of $170,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate currently is 5.6%, and you anticipate inflation of about 1.6%.
(a) What is the present value of your firm’s cash flows for years 1 through 6? and How would your answer to (a) change if you anticipated no growth in cash flow?