A project has an expected risky cash flow of x in year y


Question: A project has an expected risky cash flow of £x, in year y. The risk-free rate is 4.5% . The market rate of return is z%, and the project's beta is b. Explain the concept of certainty equivalent cash flows and use reasonable numbers to calculate the certainty equivalent cash flow for yearly.

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Finance Basics: A project has an expected risky cash flow of x in year y
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