If a company does not take inflation into account when analyzing a project, the expected net present value (NPV) of the project will typically____be than the true NPV of the project.

If a company does not take inflation into account when analyzing a project, the expected net present value (NPV) of the project will typically overstate the true NPV of the project.

Inflation is an important factor to consider in financial analysis because it erodes the purchasing power of money over time. When calculating the NPV of a project, future cash flows are discounted to their present value using a discount rate. If inflation is not taken into account, the discount rate used will not accurately reflect the time value of money, leading to an overestimation of the project's value.

By not considering inflation, the company may mistakenly believe that the project will generate higher returns than it actually will. This can result in poor investment decisions and potential financial losses.

It is important for companies to carefully consider inflation and adjust their discount rates accordingly when analyzing projects to ensure accurate NPV calculations and informed decision-making.