Green Invest Limited Discounts Cash Flows at a Nominal Rate

Green Invest Limited discounts cash flows at a nominal rate of 10%.Inflation over the next few years is expected to average 3%.Which of the following would be a correct adjustment for inflation when computing net present value?

A) Discount cash flows at 10%;increase revenues and expenses by 3% each year.
B) Discount cash flows at 13%;increase revenues and expenses by 3% each year.
C) Discount cash flows at 7%;ignore inflation when forecasting revenues and expenses.
D) Either A or C would be acceptable.