You are a consultant to a mid-sized manufacturing corporation that is considering an investment project. The project requires an initial investment of $100 million and will generate an after tax cash of $20 million in the first year and the cash flow will increase 5% thereafter every year.The projects beta is 1.5. Assuming that rf=5% and E ( rM ) = 12%, Please answer the following questions.

Years from Now	After Tax Cash Flows
0	100
1-10	20

What is the net present value of the project ?

What is the highest possible discount rate for the project before its NPV becomes negative ?

What is the highest possible beta estimate for the project before its NPV becomes negative?