3. BBC is looking to acquire ZZP Co. This investment will cost $2.3 million and is expected to give BBC returns of $680,000 yearly for the next 11 years. ZZP has a beta of 2.1. The current Treasury bond rate is 3.7% while the stock market return is 14.9%.

Calculate the risk-adjusted discount rate for ZZP and the risk-adjusted NPV. Should BBC acquire ZZP? State your reasons. (Go out 4 decimal places in your calculations)