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An investment plan includes purchasing at the beginning of the year a piece of machinery costing $109, which will be fully depreciated in the next year, and then salvaged with zero value. The profits for this year are estimated to be $169 (in actual dollars), and the combined tax rate is 16%.The real interest equals 0. What is the smallest inflation rate at which the overall investment is unprofitable (NPV = 0)? (Provide your answer as a number, not a percentage, with 0.01 precision.)

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Financial Management, Finance

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