Question
You are a consultant to a large manufacturing corporation that is considering a project with the following net after-tax cash flows (in millions of dollars):
You are a consultant to a large manufacturing corporation that is considering a project with the following net after-tax cash flows (in millions of dollars):
Years from Now After-Tax Cash Flow
0 -7
01-10 18
The project's beta is 1.3.
a.Assuming thatrf= 5% andE(rM) = 13%, 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?
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Financial Management For Public Health And Not For Profit Organizations
Authors: Steven A. Finkler
2nd Edition
0131471988, 978-0131471986
