... fooled and cheated. Expectations about inflation affect future cash flow and require return and cost of capital followed directly from the present value equation. (Emery, Finnerty, 1997) A. A person whose major asset is a house with a 30-year mortgage at a fixed interest rate. As the text stated, inflation is an increase in the general (average) price level of goods and ... could be adjusted by inflation rate. When inflation is higher, real wages actually fall. When inflation is absent, real wages stay the same, so payrolls do not shrink. (Barbara, 2002) In conclusion, a familiarity wit...

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