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You are a consultant to a large manufacturing corporation considering a project

ID: 2714322 • Letter: Y

Question

You are a consultant to a large manufacturing corporation considering a project with the following net after-tax cash flows (in millions of dollars): The project's beta is 1.7. Assuming rf = 6% and E(rM) = 16%. What is the net present value of the project? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Net present value million What is the highest possible beta estimate for the project before its NPV becomes negative? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Highest possible beta value

Explanation / Answer

You are a consultant to a large manufacturing corporation considering a project