Project alpha offers the following net cash flows following, Ask an Expert

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Project Alpha offers the following net cash flows following an initial (year 0), certain outlay (NINV) of $70,000:

Year	Net Cash Flow	Certainty Equivalent Factor
1	$30,000	0.91
2	30,000	0.79
3	30,000	0.65
4	20,000	0.52
5	20,000	0.40
6	10,000	0.30

a. Compute the NPV of this project at a 17 percent cost of capital.

b. If the risk-free rate is 8 percent, what is the certainty equivalent NPV for project Alpha?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92090907

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