Estimate for the project

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You are a consultant to a large manufacturing corporation considering a project with the following net after-tax cash flows (in millions of dollars):

Years from Now After-Tax CF

0 -31
1-9 15
10 30

The project's beta is 1.5. Assuming rf = 5% and E(rM) = 15%

a. What is the net present value of the project? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

Net Present Value =

b. What is the highest possible beta estimate for the project before its NPV becomes negative? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Highest possible beta value =

Reference no: EM132699144

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