A project with a beta of 0.75 generates after-tax incremental cash flows of $20,000 per year....

Transcribed Image Text:

A project with a beta of 0.75 generates after-tax incremental cash flows of $20,000 per year. The expected return on the market is 8% and the risk free rate is 3%. For how many years must the project generate cash flows in order for the project to just be an acceptable investment for an organization if the initial investment required for the project is $50,000? A project with a beta of 0.75 generates after-tax incremental cash flows of $20,000 per year. The expected return on the market is 8% and the risk free rate is 3%. For how many years must the project generate cash flows in order for the project to just be an acceptable investment for an organization if the initial investment required for the project is $50,000?

Answer rating: 100% (QA)

The required rate of return for the project can be calculated using the Capital ... View the full answer