15. Felix Ltd. is an all equity financed company with a cost of capital of 17.75%. The company is evaluating five annual capital investment projects with the following expected returns and risks:

Project	Initial outlay US. million	Annual cash flow US. million	Beta
P	150	165	0.3
W	150	170	0.5
X	200	240	1.0
Y	250	295	1.5
Z	250	300	2.0

Additional information:

1. The risk-free rate of return is 7.5%.

2. The market rate of return is 16%.

Required:

i). The beta factor of Felix Ltd.

ii). Using suitable computations, advise the management of Felix Ltd. on the project to undertake.

iii). Compute the beta factor of the accept project(s) based on your answers in i & ii above.