Array Solutions requires a 14.0% return on their projects. Analysis shows that even though they have been earning the desired 14.0%, their real return appears to be only 10.0% when they look at what they can buy with their returns. a. Explain why there is this discrepancy. b. Determine the inflation rate.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Array Solutions requires a 14.0% return on their projects. Analysis shows that even though they have been earning the desired 14.0%, their real return appears to be only 10.0% when they look at what they can buy with their returns. a. Explain why there is this discrepancy. b. Determine the inflation rate.

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