You are a consultant to a large manufacturing corporation considering a project with the following net after-tax cash flows (in millions of dollars)

    

Years from Now	After-Tax CF
0	-20
1-9	10
10	20

The project’s beta is 2.0. Assuming rf= 5% and E(rM)= 14%, what is the net present value of the project? What is the highest possible beta estimate for the project before its NPV becomes negative?

Answer rating: 100% (QA)

expected return 5 2 145 ... View the full answer