The ‘woodpulp’ project has an initial cost of £13,000 and the firm’s risk-free interest rate is 10 per cent. If certainty equivalents and net cash flows (NCFs) for the project are as in the following table, should the project be accepted?

Year Certainty equivalents Net cash flows (£)

1 0.90 8,000 2 0.85 7,000 3 0.80 7,000 4 0.75 5,000 5 0.70 5,000 6 0.65 5,000 7 0.60 5,000