Suppose there are two projects X and Y. Each involves an investment of K 82, 000....
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Suppose there are two projects X and Y. Each involves an investment of K 82, 000. The expected cash inflows (risk free cash inflows and risk cash flows) are given as follows: Year 1 2 3 Project X Risk free cash inflows 40,000 35,000 30,000 Risky Cash flows Project Y Risk free cash inflows 80,000 35,000 65,000 30,000 55,000 30,000 Risky Cash flows 90,000 70,000 60,000 Using certainty equivalent method, which of the two projects should be selected? Suppose there are two projects X and Y. Each involves an investment of K 82, 000. The expected cash inflows (risk free cash inflows and risk cash flows) are given as follows: Year 1 2 3 Project X Risk free cash inflows 40,000 35,000 30,000 Risky Cash flows Project Y Risk free cash inflows 80,000 35,000 65,000 30,000 55,000 30,000 Risky Cash flows 90,000 70,000 60,000 Using certainty equivalent method, which of the two projects should be selected?
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