The Bull Company, a lawn mower manufacturer, is considering the introduction of a new model. The initial investment required is $22 million. Net cash flows over the 4-year life cycle and the corresponding certainty-equivalents of the new model are as follows:Year Net Cash Flow Certainty-equivalent Factor1 $15 million 0.902 $13 million 0.803 $11 million 0.604 $9 million 0.35The firm's cost of capital is 14% and the risk-free rate is 6%. Bull uses the certainty-equivalent approach in evaluating above-average risk investments such as this one. What is the project's certainty-equivalent NPV?a. $4,164,432.44b. $26,164,432.44c. $8,028,394.34d. $30,028,394.34

Option d. $30,028,394.34

Explanation:

We can calculate certainty equivalent NPV by just a simple formula

Certainly equivalent NPV = Certain cashflow/(1+r)^n

Certain cashflows =Net cashflows x Certainty equivalent factor

r = risk free rate

At first, we need to find certain cash flows

Certain cash flow

Year1: $15,000,000  x 0.90  = $13,500,000

Year2: $13,000,000  x 0.80 = $10,400,000

Year 3: $11,000,000 x  0.60  = $6,600,000

Year 4: $9,000,000 x 0.35  =$3,150,000.

Certainly Equivalent NPV = [$13,500,000 / (1+0.06)^1] + [$10,400,000 / (1+0.06)^2] + [$6,600,000 / (1+0.06)^3] + [$3,150,000 / (1+0.06)^4]

Certainly Equivalent NPV = $12,735,849.06 + $9,255,962.98 + $5,541,487.27 + $2,495,095.04 = $30,028,394.34

the answer is: c.that person might be arrested and deported

filling w-4 form incorrectly usually would rise suspicions from government's auditors. when they notice such mistakes, they would send their teams to investigate the situation further.

if those investigation teams believe that the incorrectness is done on purpose (with malicious intent), that person can be arrested or deported

answer; burned it;