Given the information, should your firm undertake the investment? What is your reasoning behind making your recommendation?

In addition to cash flow information, you have also been provided with the details below.

• The investment opportunity available to the firm is in a different industry to the firms normal operations;
• The industry in which the investment opportunity is available is considered 40% less risky than the firms industry;
• The firms beta is 1;
• The risk-free rate is 5% p.a; and,
• The expected return on the market is 10% p.a

Year	0	1	2	3	4	5
E[Cash Flow]	-$80,000	$20,000	$20,000	$20,000	$20,000	$30,000