You are a consultant to a firm evaluating an expansion of its current business. project are as
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Question:
You are a consultant to a firm evaluating an expansion of its current business.
project are as follows:
years cash flow
0 - 100
1 - 10 +5
On the basis of the fir's stock , you believe that the beta of the firm is 1.49. Assuming that the rate of return available on risk free investments is 4% and that the expected rate of return on the market portfolio is 13%, what is the net present value of the project?
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