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Let's break down the table and the questions step by step to provide a clear answer to each part.

### Project Details:
The table provides cash flows and certainty equivalents for two projects, A and B, over three years.

| Year | Project A Cash Flow (Tk.) | Project A Certainty Equivalent | Project B Cash Flow (Tk.) | Project B Certainty Equivalent |
|------|---------------------------|-------------------------------|---------------------------|-------------------------------|
| 1    | 90,000                    | 0.8                           | 90,000                    | 0.9                           |
| 2    | 1,00,000                  | 0.7                           | 90,000                    | 0.8                           |
| 3    | 1,10,000                  | 0.5                           | 1,00,000                  | 0.6                           |

Certainty equivalent is a factor that adjusts cash flows for risk by multiplying it with the given cash flow, which helps reflect the "risk-adjusted" cash flow.

### i) Which project should be acceptable to the company?

To determine which project is preferable, the risk-adjusted cash flows should be calculated. This is done by multiplying each year’s cash flow by the certainty-equivalent factor for both projects.

#### Project A:
- Year 1: \( 90,000 \times 0.8 = 72,000 \)
- Year 2: \( 1,00,000 \times 0.7 = 70,000 \)
- Year 3: \( 1,10,000 \times 0.5 = 55,000 \)

**Total Adjusted Cash Flow for Project A:**  
\( 72,000 + 70,000 + 55,000 = 1,97,000 \)

#### Project B:
- Year 1: \( 90,000 \times 0.9 = 81,000 \)
- Year 2: \( 90,000 \times 0.8 = 72,000 \)
- Year 3: \( 1,00,000 \times 0.6 = 60,000 \)

**Total Adjusted Cash Flow for Project B:**  
\( 81,000 + 72,000 + 60,000 = 2,13,000 \)

Since **Project B** has a higher risk-adjusted total cash flow (2,13,000 Tk.) compared to Project A (1,97,000 Tk.), **Project B** should be more acceptable to the company.

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### ii) Which project is riskier? How do you know?

Risk is reflected in the certainty-equivalent factor: the lower the certainty equivalent, the greater the risk, because it represents a higher level of uncertainty about receiving the cash flows.

Looking at the certainty equivalents:
- Project A’s certainty equivalents are: 0.8, 0.7, 0.5
- Project B’s certainty equivalents are: 0.9, 0.8, 0.6

Project A consistently has lower certainty equivalents, especially in year 3, where it drops to 0.5 (compared to Project B's 0.6). This indicates that **Project A** is riskier since its cash flows are adjusted down more significantly due to risk.

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### iii) If the company was to use the risk-adjusted discount rate method, which project would be analyzed with a higher rate?

Risk-adjusted discount rates are higher for riskier projects to account for greater uncertainty. Since **Project A** is riskier, as demonstrated by its lower certainty equivalents, the company would apply a **higher discount rate** to **Project A** when using the risk-adjusted discount rate method.

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Do you want more detailed steps on how I calculated the total risk-adjusted cash flows or the impact of discount rates?

### Related Questions:
1. How does the certainty-equivalent method compare to using standard net present value (NPV)?
2. What factors contribute to a lower certainty equivalent for a project?
3. How would changing the discount rate affect the selection of a project?
4. Can we use the certainty-equivalent method to assess non-financial risks?
5. How can we adjust for inflation in the certainty-equivalent approach?

### Tip:
Certainty equivalents are a great way to adjust for risk, but always remember to consider qualitative factors such as market conditions and project execution challenges when selecting a project.

Which project should be acceptable to the company? Which project is riskier? If the company was to use the risk-adjusted discount rate method, which project would be analyzed with a higher rate?

Compare the cash flows and risk adjustments of Project A and Project B using the certainty-equivalent method. Discover which project is riskier and which one should be selected, with detailed calculations of adjusted cash flows and analysis of risk-adjusted discount rates.

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