A project has a forecasted cash flow of $110 in year 1 and $121 in year 2. Risk free rate is 5%, the estimated risk premium on the market is 10%, and the project has a beta of 0.7. If you use a constant risk-adjusted discount rate, what is
a)The PV of theproject?
b)The certainty-equivalent cash flow in year 1 and year2?
c)The ratio of the certainty-equivalent cash flows to the expected cash flows in years 1 and2?