Your firm is considering a project that is expected to produce a single cash flow of $2,000
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Question:
Your firm is considering a project that is expected to produce a single cash flow of $2,000 next year. The market beta of the project is 2.2. The equity premium is expected to be 6%, and the risk-free rate is 3.8%. What is the maximum amount your firm should be willing to invest in this project? Round your answer to the nearest dollar.
(A) $1,639
(B) $1,709
(C) $1,841
(D) $2,000
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