Kraft is considering an investment project with a risk that


The Kraft Co. is financed entirely with equity and the firm has a beta of 1.20. The current risk free-rate is 4 percent and the expected market return is 15 percent. Kraft is considering an investment project with a risk that matches the firm’s average risk, requires a net investment of $80,000, and has net cash flows of $20,000 per year for 10 years. Should Kraft Co. invest in the project using NPV? Calculate NPV show all work. Show work.

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Financial Management: Kraft is considering an investment project with a risk that
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