Exercise 1: Company X wants to invest in project A. Find out the certainty equivalent...
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Exercise 1: Company X wants to invest in project A. Find out the certainty equivalent cash flows and NPV of that project if the risk rate is 6% and the expected cash flows for five year are as follows: Period Cashflow CEC 1 0.80 5,000 8,000 2 0.60 3 0.70 8,900 12,000 4 0.30 5 14,400 0.40 The cash outflow(initial investment) Co is RM20,000 Calculate the certainty equivalent technique
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