One thing
to keep in mind with present value calculations, if you calculate the present
value using real cash flows and the real interest rate or nominal cash flows
and the nominal interest rate, the present value will be unaffected. This is true for capital budgeting as well So where
can you get expectations of future inflation? One place is the New York Federal
Reserve, which publishes microeconomic data, including expectations of consumer inflation. We should warn you, these are expectations, and like any
expectations, are not exact.
