3. For the following project, the chief financial officer (CFO), who is a proponent of certainty- equivalent methodology, has prepared a set of certainty-equivalent factors to adjust the cash flows for the estimated risk. The economics department, however, is a proponent of a conventional discounted cash flow (DCF) analysis and has estimated a risk-adjusted cost of capital (WACC) of 12% to discount the project's expected cash flows. The project's initial investment in Year 0 is $150,000 and the yield on Treasury securities is 8%. Year 1 2 2 Expected cash flows $50,000 $75,000 $150,000 Certainty equivalent factors 0.9 0.8 0.6 a. (8 points) What is the NPV of the project from the CFO's perspective? b. (7 points) What is the NPV of the project from the economics department's standpoint? c. (3 points) What are the advantages of using certainty-equivalent cash flows instead of risk-adjusted cost of capital to calculate the NPV of an investment project