Question: 4. A project has following projected cash flows: The estimated project beta is 1.5. The market return rm is 16%, and the risk-free rate rf

4. A project has following projected cash flows: The estimated project beta is 1.5. The market return rm is 16%, and the risk-free rate rf is 7%. a. Estimate the cost of capital and the project's total PV (to discount each cash flow, use the same rate that you have calculated here). b. What are the certainty-equivalent cash flows in each year?

Cash Flows ($ thousands) Co C1 -100 +40 +60 +50

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