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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
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 Me. After-Tax CF -32 1-9 10 The project's beta is 1.6. Assuming r = 6% and E(TM) = 16% a. What is the net present value of the project? b. What is the highest possible beta estimate for the project before its NPV becomes negative? The internal rate of return on the project is 46.32%
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