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A project has the following forecasted cash flows: Cash Flows ($ thousands) Co 125 C2 +85 C3 +75 67 The estimated project beta is 1.55.
A project has the following forecasted cash flows: Cash Flows ($ thousands) Co 125 C2 +85 C3 +75 67 The estimated project beta is 1.55. The market retum rm is 17%, and te risk-free rate ry is 796. a. Estimate the opportunity cost of capital and the project's PV (using the same rate to discount each cash flow). (Do not round intermediate calculations. Enter your cost of capital answer as a percent and enter your PV answer in thousands. Round your answers to 2 decimal places.) Cost of capital PV b. What are the certainty-equivalent cash flows in each year? (Do not round intermediate calculations. Enter your answers in thousands rounded to 2 decimal places.) Yoar Cash Flow c. What is the ratio of the certainty-equivalent cash low to the expected cash flow in each year? (Do not round intermediate calculations. Round your answers to 4 decimal places.) Year Ratio
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