You are a consultant to a large manufacturing corporation considering a project with the following net after-tax cash flows (in millions of dollars):

Years from Now / After Tax CF

0 / -23

1 / 5

2 / 10

3 / 15

a) The projects beta is 2. Assuming the annual risk-free rate is 4% and the expected annual rate of market return is 9%. What is the net present value of the project?

b) Suppose the projects beta decreases to 1. How would the change affect the projects net present value?