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Question 4 [3 Marks) Company Y has conducted a risk assessment on a project it is considering. The company adjusts its WACC by adding a
Question 4 [3 Marks) Company Y has conducted a risk assessment on a project it is considering. The company adjusts its WACC by adding a risk premium based on the coefficient of variation of a project as follows: CV Adjustment 0% -50% -1% 50% - 70% 0% 71% - 90% 3% The project has a coefficient of variation of 80% associated with it. The project has the following net cash flows associated with it: Year 0 Year 1 Year2 Year 3 Year 4 Year 5 -R100 R50 R20 R30 R40 R60 The company has a WACC of 15%. What is the risk adjusted NPV of the project
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