You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are as follows:Years Cash Flow0 −2801–10 +70a. On the basis of the behavior of the firm’s stock, you believe that the beta of the firm is 1.5. Assuming that the rate of return available on risk-free investments is 8% and that the expected rate of return on the market portfolio is 10%, what is the net present value of the project? (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) NPV $
Please CLICK HERE for solutionRegardsLinda
I added an image to my reply..I'm getting a wrong answer. .78 was included in the answer
Two clarification neededAre we suppose to use Present value of annuity table to solve these questions? As this might change the value due to rounding?Are we suppose to enter value in million?
Unfortunately I'm going by the mcgraw hill website to answer. I'm only left with what the website tells me to do when answering these questions.
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Post Graduate Diploma in Management (MBA)
132.25 was correct! You are awesome!
Great!!If you like my work you can request me by writing "FOR LINDA" in front of your new post..RegardsLinda