What is the net present value of the project and what is


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

-40

1-10

15

The project's beta is 1.8. Assuming that rf = 8% and E(rM) =16%, what is the net present value of the project? What is the highest possible beta estimate for the project before its NPV becomes negative?

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Accounting Basics: What is the net present value of the project and what is
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