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these experts opinions of the market risk premium NPV analysis [LO 2) Spares Ltd manufactures car parts and management is considering an expansion of its

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these experts opinions of the market risk premium NPV analysis [LO 2) Spares Ltd manufactures car parts and management is considering an expansion of its existing operations at a cost of $600000. It expects this expansion to generate additional net cash inflows for the next 10 years as follows: $100000 per annum in Years 1-5 and $130000 per annum in Years 6-10. The company's analyst has made the following estimates: a) the systematic risk of the company's existing assets is 0.75 b) the risk-free interest rate is 11 per cent per annum c) the expected rate of return on the marketsortfolio is 15 per cent per annum. Assuming that there is no company income tax, should the company undertake the expansion

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