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You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are
You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are as follows: Years Cash Flow 0 1-10 - 10e 15 On the basis of the behavior of the firm's stock, you believe that the beta of the firm is 1.4. Assume that the rate of return available orn risk-free investments is 4% and that the expected rate of return on the market portfolio is 12%. a. What is the project IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) IRR b. what is the cost of capital for the project? (D not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Cost of capital
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