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Consider the following expected net cash flows for a project: Year 0 1 2 3 4 5 Expected NCF $(100,000) 80,000 60,000 70,000 10,000
Consider the following expected net cash flows for a project: Year 0 1 2 3 4 5 Expected NCF $(100,000) 80,000 60,000 70,000 10,000 10,000 Certainty Equivalent Factor 1.0 0.5 0.5 0.5 0.6 0.4 Your boss wants you to calculate the NPV of this project and says to use the annual risk-free rate of 3% as a discount rate. Calculate NPV using this discount rate, without any risk adjustment.
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YEAR CASH FLOW CERTAINITY EQUIVALENT CE CASH FLOW CE 1 3 n PRESENT ...
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An Introduction To Statistical Methods And Data Analysis
Authors: R. Lyman Ott, Micheal T. Longnecker
7th Edition
1305269470, 978-1305465527, 1305465520, 978-1305269477
