Billy Bob is considering building a water slide park that will require a net investment of $200,000 and yield the following net cash flows:

If the risk-free rate is 8 percent and the market risk premium is 6 percent, what is the certainty equivalent NPV for this project?
A)$12,805
B)$5,746
C)$3,703
D)$11,025

Question

Billy Bob is considering building a water slide park that will require a net investment of $200,000 and yield the following net cash flows:

If the risk-free rate is 8 percent and the market risk premium is 6 percent, what is the certainty equivalent NPV for this project?
A)$12,805 
B)$5,746 
C)$3,703 
D)$11,025

Quizplus · Accepted Answer

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Billy Bob Is Considering Building a Water Slide Park That