A project has an initial cash outflow of $3500. The project has 3 years of life. The project has a medium risk profile with cost of capital of 8%. Estimates suggest that the certainty equivalent cash inflows for the project are 70% of the expected cash flows. The expected annual cash flows are $1200, $1000, and $1100. If the risk free rate is 5%.

What is the equivalent certainty estimate of the NPV for the project?

Answer rating: 100% (QA)

To calculate the equivalent certainty estimate of the NPV Net Present Value for the project we need ... View the full answer