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5. [10 pts] Chips LLC is considering investing in a 3-year project that is expected to generate operating cash flows of $25 million, $30 million,

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5. [10 pts] Chips LLC is considering investing in a 3-year project that is expected to generate operating cash flows of $25 million, $30 million, and $30 milion, in years 1,2 , and 3 , respectively. The WACC is estimated to be 8.5 percent. How much should the company pay for this project? 6. [15 pts] Assets A and asset B have the following expected returns under two economic scenarios: Assume you create a portfolio of assets A and B with equal weights. a. Calculate the expected return of the portfolio under the RECESSION scenario. b. Calculate the expected return of the portfolio under the BOOM scenario. c. Calculate the expected return of the portfolio

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