MTM Ltd. earns 10.25 percent on its current investments after adjusting for inflation. Inflation is expected to average 2.8 percent annually over the next 5 years. What discount rate should the firm assign to a project assuming the project has a life of 5 years and the same level of risk as the firm's current operations?
A) 12.96 percent
B) 13.05 percent
C) 13.14 percent
D) 13.34 percent
E) 12.87 percent
D) 13.34 percent
Business
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