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I dont really understand why it is used the nominal after tax cost of capital instead the real one to discount the after cash flow. I am not sure if the reason is because we do not have interests to pay.
Thanks
The nominal cost of capital is the actual cost of capital; the real cost of capital is the cost of capital if there was no inflation.
We discount the nominal (actual) cash flows at the nominal cost of capital.
The cash flows given are without inflation and so we have to inflate the cash flows to get the nominal cash flows.(I don’t know why you think there is no interest to pay. If there was no interest then there would be no need to discount!!!!!!)
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