0 A firm has two projects for evaluation. The utility function of the firm providing relative utility values for cash flow is as follows Cash flow Utilities Cash flow Utilities 0 6.000 74 1.000 15 7.000 82 2.000 29 8.000 89 3.000 42 9.000 95 4.000 54 10.000 100 5.000 65 The cash flow details along with associated probabilities are as follows: 0.2 0.5 0.3 Proiect A Project B Net cash flow (First year) Probability Net cash flow (First year) Probability 2000 5000 0.3 6000 6000 0.4 9000 0.3 7000 Net cash flow (Second vear) Probability Net cash flow (Second year) Probability 3000 0.4 4000 0.3 5000 0.3 5000 10000 0.3 7000 0.5 Given the utility function which of the projects should be accepted? (Discount rate: 30 percent) 0.2 30% 30% Single Payment Compound Present Amount Worth Factor Factor Find F Find P Given P Given F F/P P/F 1.300 .7692 1.690 5917 Sinking Fund Factor Find A Given F A/F 1.0000 .4348 Compound Interest Factors Uniform Payment Series Capital Compound Recovery Amount Factor Factor Find A Find F Given P Given A A/P F/A 1.3000 1.000 .7348 2.300 Present Worth Factor Find P Given A P/A 0.769 1.361 Arithmetic Gradient Gradient Gradient Uniform Present Series Worth Find A Find P Given G Given G A/G P/G 0 0 0.435 0.592 n n 1 2 2