Question No 4: (2+2 = 4 marks) Homer Stores is considering a new location that is expected to yield the following net cash flows following an initial (year 0), certain outlay (NINV) of $75,000: Year Net Cash Flows Certainty Equivalent Factor 1 $30.000 0.90 2 40.000 0.85 3 30,000 0.65 4 20,000 0.50 a Compute the NPV of this project at a 15 percent cost of capital. b. If the risk-free rate is 8 percent, what is the certainty equivalent NPV for the new location? 2