A project has a forecasted cash flow of $$125$ in year $1$ and $$136$ in year $2.$ The interest rate is $8\%,$ the estimated risk premium on the

market is $11\mathrm{.}25\%,$ and the project has a beta of $0\mathrm{.}65.$ If you use a constant risk$-$adjusted discount rate, answer the following:

a$.$ What is the PV of the project?

b$.$ What is the certainty$-$equivalent cash flow in year $1$ and year $2?$

c$.$ What is the ratio of the certainty$-$equivalent cash flows to the expected cash?

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

What is the certainty$-$equivalent cash flow in year $1$ and year $2?$

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.