Smith Inc.'s cost of capital is 11% and the risk-free rate is 5%. The company plans to invest in a new project. The cash flow projections ($000) for the project are given below. Calculate the certainty equivalent NPV ($000). $\begin{array}{lllllll}
\text { Year } & \mathbf{0} & \mathbf{1} & \mathbf{2} & \mathbf{3} & \mathbf{4} & \mathbf{5} \
\text { Cash Flow } & -500 & 150 & 150 & 150 & 150 & 150 \
\text { CE factor } & 1 & 0.9 & 0.85 & 0.8 & 0.75 & 0.7
\end{array}$

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The Answer of Smith Inc.'s cost of capital is 11% and the risk-free rate is 5%. The company plans to invest in a new project. The cash flow projections ($000) for the project are given below. Calculate the certainty equivalent NPV ($000). $\begin{array}{lllllll}
\text { Year } & \mathbf{0} & \mathbf{1} & \mathbf{2} & \mathbf{3} & \mathbf{4} & \mathbf{5} \
\text { Cash Flow } & -500 & 150 & 150 & 150 & 150 & 150 \
\text { CE factor } & 1 & 0.9 & 0.85 & 0.8 & 0.75 & 0.7
\end{array}$

Smith Inc'S Cost of Capital Is 11% and the Risk-Free Rate