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Please give detailed answers for both, will give like. thank you A firm that pays no tax is considering a 5 year project that requires
Please give detailed answers for both, will give like. thank you
A firm that pays no tax is considering a 5 year project that requires an initial investment of $25,000 and has a beta of 1.5. The project has the following annual projected income statement: The treasury bill rate is 3% and the expected return on the market is 6.33%/ a) What is the degree of operating leverage of the project? b) What is the accounting breakeven point for this project? c) What is the NPV breakeven point for the project? d) If your answers to parts b and c are different, explain why. Question 2 ( 2 marks) What will happen to the expected return on a stock with a beta of 1.5 and market risk premium of 9% if the treasury bill rate increases from 3% to 5% Step by Step Solution
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