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30. CAPM and Cost of Capital. Suppose the Treasury bill rate is 4% and the market risk premium is 7%. (LO12-3) a. What are the

30. CAPM and Cost of Capital. Suppose the Treasury bill rate is 4% and the market risk premium is 7%. (LO12-3) a. What are the project costs of capital for new ventures with betas of .75 and 1.75? b. Which of the following capital investments have positive NPVs? Project Beta Internal Rate of Return (%) 1.0 14 0 R 2.0 18 S 0.4 7 T 1.6 20

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