Determine the inflation rate

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Reference no: EM131159497

Array Solutions requires a 14 percent return on their projects. Analysis shows that even though they have been earning the desired 14 percent, their real return appears to be only 10 percent when they look at what they can buy with their returns.

a. Explain why there is this discrepancy.

b. Determine the inflation rate.

Reference no: EM131159497

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