Zeta Inc.'s cost of capital is 12% and the risk-free rate is 5%. It plans to invest in a new project. The cash flow projections ($000) for the project are given below. Calculate the difference in the traditional NPV and the certainty equivalent NPV. $\begin{array}{llllll}
\text { Year } & \mathbf{0} & \mathbf{1} & \mathbf{2} & \mathbf{3} & \mathbf{4} \
\text { Cash Flow } & -240 & 75 & 75 & 75 & 75 \
\text { CE factor } & 1 & 0.9 & 0.85 & 0.8 & 0.75
\end{array}$

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The Answer of Zeta Inc.'s cost of capital is 12% and the risk-free rate is 5%. It plans to invest in a new project. The cash flow projections ($000) for the project are given below. Calculate the difference in the traditional NPV and the certainty equivalent NPV. $\begin{array}{llllll}
\text { Year } & \mathbf{0} & \mathbf{1} & \mathbf{2} & \mathbf{3} & \mathbf{4} \
\text { Cash Flow } & -240 & 75 & 75 & 75 & 75 \
\text { CE factor } & 1 & 0.9 & 0.85 & 0.8 & 0.75
\end{array}$

Zeta Inc'S Cost of Capital Is 12% and the Risk-Free Rate