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A project has a forecasted cash flow of $ 1 1 8 in year 1 and $ 1 2 9 in year 2 . The

A project has a forecasted cash flow of $118 in year 1 and $129 in year 2. The interest rate is 5%, the estimated risk premium on the market is 12%, and the project has a beta of 0.58. 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?
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