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A project has a forecasted cash flow of $127 in year 1 and $138 in year 2. The interest rate is 6%, the estimated risk
A project has a forecasted cash flow of $127 in year 1 and $138 in year 2. The interest rate is 6%, the estimated risk premium on the market is 11.75%, and the project has a beta of 0.67. 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
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