Business, 02.07.2019 04:20 tashaunalewis4786

The estimated project beta is 1.5. the market return rm is 16%, and the risk-free rate rf is 7%. a. estimate the opportunity cost of capital and the project’s pv (using the same rate to discount each cash flow). b. what are the certainty-equivalent cash flows in each year? c. what is the ratio of the certainty-equivalent cash flow to the expected cash flow in each year? d. explain why this ratio declines.

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The estimated project beta is 1.5. the market return rm is 16%, and the risk-free rate rf is 7%. a....

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