Consider the following projects.

Project C0 C1 C2 C3 C4 C5 C6

A -1,000 +1,000 0 0 0 0 0

B -2,000 +1,000 +1,000 +4,000 +1,000 +1,000 -500

C -3,000 +1,000 +1,000 0 +1,000 +1,000 -500

Assume that this firms beta= 1.0 The expected market return is 8%.

The risk free rate is 4.5%. This company can borrow debt at 5.2%.

The firm has $5 billion in debt. It has 6 billion shares outstanding at $2 price/shr.

The corporate tax rate (Tc) = 21%

Question: What is the NPV of project B ?

Multiple Choice

The NPV for project B is $4,115

The NPV for project B is $3,958

The NPV for project B is $3,458

The NPV for project B is $3,850

The NPV for project B is $4,239

Assume that this firm's beta= 1.0 The expected make redum is gr\%. The risk free rate is 4.5%, This compary can borrow debt at 5.2%. The firm has 55 billion in debt. It has 6 bilion shares outstanding at $2 priceishe. The corporate tax rate (Tc) =21% Question: What is the NPV of project B? Muituple Cruoice The NPV for project B is $4,115 The NPV for project B is $3,958