Check my werk 8 Problem 13-25 Certainty equivalent approach (LO13-1) 10 points Reference Sheila Goodman recently received her MBA from the Harvard Business School. She has joined the family business, Goodman Software Products Inc. as Vice-President of Finance She believes in adjusting projects for risk Her father is somewhat skeptical but agrees to go along with her. Her approach is somewhat different than the risk adjusted discount rate approach, but acheves the same objective She suggests that the inflows for each year of a project be adjusted downward for lack of certainty and then be discounted back at a risk free rate. The theory is that the adjustment penalty makes the inflows the equivalent of riskless inflows, and therefore a risk-free rate is justified A table showing the possible coefficient of variation for an inflow and the associated adjustment factor is shown next Coefficient of Adjustment Variation Factor 0 -0.25 e. 0.26 -0.50 0.80 0.51 -0.75 0.70 0.76 -1.ee 0.50 1.01 -1.25 0.50 Assume a $160,000 project provides the following inflows with the associated coefficients of variation for each year Coefficient of Check my work 00 8 Assume a $160,000 project provides the following inflows with the associated coeficients of variation for each year, Cofrecent of Variation -0.10 0.27 10 Year 1 2 3 4 5 Inflow $30,78 50,300 26,900 61.900 66,00 0.72 1.03 Use Arbendix for an approxmate answer but calculate your final answer using the formula and financial Calculator methods a. Fill in the table below. (Do not round intermediate calculations. Round Adjustment Factor answers to 2 decimal places and other answers to the nearest whole dollar) Adjustment Factor Adjusted Inflow Year 1 2 5 Check my work 8 10 points b-1. If the risk-free rate is 6 percent, compute the net present value of the adjusted inflows. (Negative amount should be indicated by a minus sign. Do not round Intermediate calculations and round your answer to 2 decimal places.) Print Nel present value b-2. Should this project be accepted? O No Yes