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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 )

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
0100
1-10+14
On the basis of the behavior of the firms stock, you believe that the beta of the firm is 1.41. Assume that the rate of return available on risk-free investments is 5% and that the expected rate of return on the market portfolio is 13%.
What is the project IRR?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
What is the cost of capital for the project?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Does the accept-reject decision using IRR agree with the decision using NPV? 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:
On the basis of the behavior of the firm's stock, you believe that the beta of the firm is 1.41. Assume that the rate of return available on
risk-free investments is 5% and that the expected rate of return on the market portfolio is 13%.
a. What is the project IRR?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
b. What is the cost of capital for the project?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
c. Does the accept-reject decision using IRR agree with the decision using NPV?
a. IRR
b. Cost of capital
%%
c. Does the accept-reject decision using IRR agree with the decision using NPV?
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