Sheila Goodman recently received her MBA from the Harvard Business School. She has joined the family business, Goodman Software Products Incorporated, as Vice$-$President of Finance. She believes in adjusting projects for risk. Her father is somewhat skeptical but agrees to go along with her. Her approach is somewhat different than the risk$-$adjusted discount rate approach, but achieves the same objective. She suggests that the inflows for each year of a project be adjusted downward for lack of certainty and then be discounted back at a risk$-$free rate. The theory is that the adjustment penalty makes the inflows the equivalent of risk$-$less inflows, and therefore a risk$-$free rate is justified.

A table showing the possible coefficient of variation for an inflow and the associated adjustment factor is shown next:

$\backslash$table$[[\backslash$table$[[$Coefficient of$],[$Variation$]],\backslash$table$[[$Adjustment$],[$Factor$]]],[0-0\mathrm{.}25,0\mathrm{.}90],[0\mathrm{.}26-0\mathrm{.}50,0\mathrm{.}80],[0\mathrm{.}51-0\mathrm{.}75,0\mathrm{.}70],[0\mathrm{.}76-1\mathrm{.}00,0\mathrm{.}60],[1\mathrm{.}01-1\mathrm{.}25,0\mathrm{.}50]]$

Assume a $$165,000$ project provides the following inflows with the associated coefficients of variation for each year.

$\backslash$table$[[$Year$,$Inflow,$\backslash$table$[[$Coefficient of$],[$Variation$]]],[1,$$$30,600,0\mathrm{.}14],[2,56,100,0\mathrm{.}24],[3,73,800,0\mathrm{.}48],[4,61,700,0\mathrm{.}85],[5,67,700,1\mathrm{.}11]]$

Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.