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Draw the securities market line (SML) when the bond ratio is 10% and the market risk premium is 8%. Calculate the cost of capital for

Draw the securities market line (SML) when the bond ratio is 10% and the market risk premium is 8%. Calculate the cost of capital for the following projects. Which of the following capital investments has a positive NPV? Explain why?

projectBetaInternal rate of return (%
P1.020
Q010
R2.025
S0.416
T1.625

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