Question 7 A firm considers undertaking an investment project with the following cash flows: initial machine purchase: $20,000; revenue from sales of production of S6,000 in year one and $12,000 in year two. At the end of year three it sells the machine for S3,000. Suppose that the risk-free rate is equal to 2%, and that the expected return on the market portfolio is equal to 5%. 7.a. If the beta (B) of the project is equal to 1.5 what discount rate should you use to calculate the net-present value of the project? 7.b. Should the firm undertake the project? 7.c. Should the firm undertake the project if the beta of the project is equal to zero