Computing npv of project

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Reference no: EM1338102

Q1) Assume the expected return on the market portfolio is 15% and the riskless return is 9%. Also assume that all of the projects listed here are perpetuities with annual cash flows (in $) and betas as indicated. None of the projects requires or precludes any of the other projects, and each project costs $2,000

1. What is the NPV of each project?

2. Which projects should the firm undertake?

PROJECT A B C D E F
Annual cash flow 310 500 435 270 385 450
Beta 1.00 2.25 2.22 0.65 1.37 2.36

Reference no: EM1338102

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