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Should xyz take this project if it has the same risk

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Reference no: EM132068196

XYZ is an all equity firm with a beta of 0.95. The market risk premium is 9% and the risk-free rate is 5%. The company is considering a project that will bring in cash flows of $340,000 at year end for 5 years.

The project requires an immediate investment of 1.2 million. Should XYZ take this project if it has the same risk as the firm as a whole?

Reference no: EM132068196

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