The CFO of a compary in a hich-rhk industry (asset beta of 1.275 ) has hired you to estimate the presnist value of eash outhicme howrh on raw materials for the next 10 years which includes both foed and variable components. The comparyy has entered into a fimed-price contract with a raw materlal supplier at 510mmin per year from year 3 to yat 9 . In addetion to fined costs, variable cash outflow for purchasing other raw materials averages to 510 monn per year from year 1 to ysar 10, but these outfiows are highly risky. The CFO is unsure how risk should be accounted for, especially because she is dealing with outflows instead of lnftown. If high tisk meanh higher discount rates, then the CFO wonders whether high risk of outflows means she should worry less about them toecause preient values of outflows will be lower)? This doesn't sound right to her. complicate matters, there are various discount rates to choose from. Debtholders in the company recelve a 2% premium over U.S. easury bonds and the debt beta is 0.15. Treasury bonds yield 3% return. Equity investors beheve 25% is the expected return from esting in other equity sccuritics of similar risk. Assume the marginal tax rate is zero. at is your best estimate of the present value of total raw material costs? aartial credit, explain your thought process even if you don't get to the final answer)