Question
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 | After-Tax CF |
| 0 | 29 |
| 19 | 15 |
| 10 | 30 |
| The project's beta is 1.8. Assuming rf = 6% and E(rM) = 16%. |
| a. | What is the net present value of the project? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) |
| Net present value | million |
| b. | What is the highest possible beta estimate for the project before its NPV becomes negative? (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Highest possible beta value |
rev: 06_29_2015_QC_CS-18496
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Distressed Debt Analysis Strategies For Speculative Investors
Authors: Stephen Moyer
1st Edition
1932159185, 978-1932159189
