Question: Mett Co. is planning to develop a new product. A year after the launch of the product, it can generate additional cash flows for the
Mett Co. is planning to develop a new product. A year after the launch of the product, it can generate additional cash flows for the company of either 250,000, 110,000, 90,000 or 50,000, with all four scenarios equally likely. The project requires an initial investment of 90,000. The companys beta is 0.65, its cost of capital is 6%, and the riskfree rate is 3%. Assume perfect capital markets. A. What is the Net Present Value (NPV) of the project?
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