Question: help with the incorrect answers please Problem 13-25 Certainty equivalent approach (LO13-1) Sheila Goodman recently received her MBA from the Harvard Business School. She has

help with the incorrect answers please
help with the incorrect answers please Problem 13-25 Certainty equivalent approach (LO13-1)
Sheila Goodman recently received her MBA from the Harvard Business School. She

Problem 13-25 Certainty equivalent approach (LO13-1) 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 achieves 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 or Adjustment Factor @-0.25 0.90 0.26 -0.50 0.51 -0.75 0.70 0.76 - 1.00 0.60 1.01 -1.25 Variation 0.80 0.50 Assume a $165,000 project provides the following inflows with the associated coefficients of variation for each year, Coefficient of Year Inflow Variation 1 $30, 600 0.14 2 56,100 0.24 3 73,00 0.48 4 61,700 0.85 5 67,700 1.11 Use Appendix B for an approximate 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) 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) Year 1 2 3 Answer is complete but not entirely correct. Adjustment Adjusted Factor Inflow 0.90 27,540 0.90 44,880X 0.80 51,660X 0.60 37,020 0.50 33,850 4 5 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.) Answer is complete but not entirely correct. Not present value 0.527.683

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