Interviews with senior managers have produced the following adjustments to the expected cash flow in years 1 to 7. For each year the estimated adjustment needed to obtain the certainty equivalent cash flow is shown as a ratio which needs to be applied to the estimated values to yield the certainty equivalent values

year	Expected cash flow (000s)	Ratio to obtain certainty equivalent
1	8	0.9
2	7	0.85
3	7	0.8
4	5	0.75
5	5	0.7
6	5	0.65
7	5	0.60

Explain what it means that all the ratios are less than unity.

If the project has an initial value of 13,000 and the firms own discount is 20% with the risk free discount being 10%, should be project be accepted if you use the certainty equivalent data?