| NPV - Solution For a client in a high risk (hence high expected return), a higher hurdle rate would be used Hurdle rate = 25% 1 3 Cost of project -100.00 +70 +50 +20 Estimated incremental CF from project 1/(1.25)=0.8000 +56.00 +32.00 +10.24 Values = -1.76 1/(1.25)= 0.6400 1/(1.25)= 0.5120