How to compute what is the net present value of the project

Assignment Help Financial Accounting
Reference no: EM132565818

You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are as follows:

Years               Cash Flow

0                  -100

1-10                    +17

Question 1: On the basis of the behavior of the firm's stock, you believe that the beta of the firm is 1.32. Assuming that the rate of return available on risk-free investments is 3% and that the expected rate of return on the market portfolio is 16%, what is the net present value of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions of dollars rounded to 2 decimal places.)

Reference no: EM132565818

Questions Cloud

Perform necessary research to understand working principle : Identify the most critical components of the university's information system - the critical information assets. Identify what threats the BYOD policy may bring
Build a cell wall a better choice for an antibiotic : Why is a drug that blocks a cell's ability to build a cell wall a better choice for an antibiotic
Prepare the ncessary adjusting entries for december : Eversure Hosptial's preadjusted trial balance, Prepare, in general journal form, the ncessary adjusting entries for December 31, 20X1
Factors impact the size of the population : affect the population size based off the equation, and explaining how these factors impact the size of the population.
How to compute what is the net present value of the project : Risk-free investments is 3% and that the expected rate of return on the market portfolio is 16%, what is the net present value of the project?
Write one hypothesis and one prediction for the experiment : Write one hypothesis and one prediction for the experiment (based on the list of variables)
PROJ6009 Business Process Management and Systems Assignment : PROJ6009 Business Process Management and Systems Assignment Help and Solution, Laureate International Universities - Assessment Writing Service
Why is cellular respiration important to living organism : Why is cellular respiration important to living organism? Describe the two different form (types) of cellular respiration
What is best guess as to the rate of return on the stock : What is best guess as to the rate of return on the stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd