Question: A project is determined to have equal probability of generating $6.00 million annually or $4.00 million annually for six years. The initial investment is $19.13

A project is determined to have equal probability of generating $6.00 million annually or $4.00 million annually for six years. The initial investment is $19.13 million. The expected return on Treasury bills is 4.60 % and the market return is 13.60%. What is the highest project beta that will justify acceptance of the project?

(no excel please)

a. 0.89

b. 1.11

c. 1.07

d. 5.80

e. 1.33

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