1.Explain how capital budgeting is related to the wealth -maximazation goal that should pursued by financial manager of a firm.

1(i) A project is expected to generate net cash flows of Tsh 100Million in each of the year 1 and 2.It's beta will be 1.5 throughout its life. The risk free interest rate is 10percet,and the expected return on the market is 18percent

Calculate

a. Present value of cash flows

b. Certainty equivalent of cash flows

c. Ration of the certainty equivalents to the expected cash flows