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Part 2) You are a consultant to a large manufacturing company considering a project with the following net after-tax cash flows [in millions of dollars]:
Part 2) You are a consultant to a large manufacturing company considering a project with the following net after-tax cash flows [in millions of dollars]:
| Years from now | After tax CF |
| 0 | -10 |
| 1-8 | 8 |
| 9 | 15 |
The projects beta is 1.5. Assuming Rf= 3% and E(Rm) = 15%, what is the net present value of the project?
What is your recommendation to the Board regarding acceptance/rejection of the project?
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