Hi, Can someone help me with this question? How would a higher than expected inflation rate affect the value of real tax savings from depreciation and the value of real after-tax interest expense, everything else held constant? It should be A (real tax savings from depreciation & real interest expense would be lower) instead of the answer they provided B (real tax savings from depreciation would be higher and real interest expense would be lower)? Thanks in advance!
Check Errata please… answer has been corrected to A…