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Your company is evaluating the prospect of purchasing a new plant from a competitor. Because of the risk involved with the endeavor, the company wants
Your company is evaluating the prospect of purchasing a new plant from a competitor. Because of the risk involved with the endeavor, the company wants you to evaluate the value of the
project adjusting for certainty in cash flow payments likely to arise from the purchase. Evaluate the net present value of the following cash flows applying a percent certainty
equivalent and a percent riskfree rate.
a $
b $
c $
d $
PLEASE DO WITH EXCEL
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