How to Calculate Certainty Equivalent Cashflow?
Certainty Equivalent Cashflow calculator uses Certainty Equivalent Cashflow = Expected Cash Flow/(1+Risk Premium) to calculate the Certainty Equivalent Cashflow, The Certainty Equivalent Cashflow formula is a concept used in decision theory and risk analysis, particularly in evaluating investment projects or financial decisions under conditions of uncertainty. Certainty Equivalent Cashflow is denoted by CECF symbol.
How to calculate Certainty Equivalent Cashflow using this online calculator? To use this online calculator for Certainty Equivalent Cashflow, enter Expected Cash Flow (C) & Risk Premium (R_{p}) and hit the calculate button. Here is how the Certainty Equivalent Cashflow calculation can be explained with given input values -> 487.8049 = 20000/(1+40).