A company is considering a four-year project that has an initial after-tax cost of $100,000. The future cash inflows from its project are $40,000, $40,000, $30,000 and $30,000 for years 1, 2, 3 and 4, respectively. They use the net present value method and has a discount rate of 16%. 1. Will the company accept the projects if the firm uses the NPV rule? Explain. 2. What is the modified internal rate of return for this project? 1. Calculate the standard deviation of the expected retum glven the economic states, their Ukelihoods, and the potential returns in the table below. Economic State Probability Return Fast Growth 0.5 Slow Growth Recession Depression 2. A company that has a beta of 1.2 will eam a return of 15% in the coming year. It is Observed that the expected rate of retum on the market is 12% and the rate on T-Bills is 4%. Based on your firm's level of risk, determine the return it should earn and establish and based on your position state, give reasons if the firm is over or undervalued. W