Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios: $($LO $7-2)$

$\backslash$table$[[$Scenario$,$Probability,Market Return,Aggressive Stock,Defensive Stock$],[1,5,5\%,2\%,3\mathrm{.}5\%$

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$\backslash$table$[[$Years from Now,After$-$Tax CF$],[0,-20],[1-10,10]]$

The project's beta is $1\mathrm{.}7.$ Assuming $r_f=9\%$ and $E(r_M)=19\%,$ what is the net present value of the project? What is the highest possible beta estimate for the project before its NPV becomes negative? $($LO $7-2)$

$12.$ Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios:

$($LO $7-2)$

$\backslash$table$[[$Scenario$,$Probability,Market Return,Aggressive Stock,Defensive Stock$],[1,5,5\%,2\%,3\mathrm{.}5\%$