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You are a consultant to a firm evaluating an expansion of its current business. The annual cash flow forecasts for the project are: Year 0:
You are a consultant to a firm evaluating an expansion of its current business. The annual cash flow forecasts for the project are: Year 0: -140 Years 1-10: +25 Based on the behaviour of the firm's stock, you have found the beta of the firm is 1.85. Assuming that the rate of return available on risk-free investments is 5 percent and the expected rate of return on the market portfolio is 11 percent, what is the net present value of the project?
A.zero |
B.110 |
C.140 |
D.negative $19.62 |
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