Suppose a capital investment will generate cash flows in with an expected value of $1,500 for each of the four years and standard deviation of $400. The risk-free rate is 5% and the company uses a 10% required return for investments with this level of risk. Find certainty equivalent.

(a) $4754.80. (b) $2,000. (c) $1,340.41. (d) $925.42.