Question
The Treasury bill rate is 5% and the market risk premium is 7%. Project Beta Internal Rate of Return, % P 0.85 18 Q 0.00
| The Treasury bill rate is 5% and the market risk premium is 7%. |
| Project | Beta | Internal Rate of Return, % |
|---|---|---|
| P | 0.85 | 18 |
| Q | 0.00 | 14 |
| R | 2.00 | 18 |
| S | 0.25 | 15 |
| T | 1.50 | 20 |
| a. | What are the project costs of capital for new ventures with betas of .60 and 1.57? (Do not round intermediate calculations. Round your answers to 2 decimal places.) |
| b. | Which of the capital investments have positive NPVs? (Capital investments are projects P, Q, R, S, and T) |
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Advances In Financial Machine Learning
Authors: Marcos Lopez De Prado
1st Edition
1119482089, 978-1119482086
