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What are the project costs of capital for new ventures

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Reference no: EM132921665

Question - The Treasury bill rate is 4% and the market risk premium is 8%.

Project

Beta

Internal Rate of Return, %

P

1.10

16

Q

0.00

12

R

2.00

20

S

0.50

13

T

1.60

22

Required -

a. What are the project costs of capital for new ventures with betas of 0.85 and 1.78?

b. Which of the capital investments shown above have positive (non-zero) NPV's?

Reference no: EM132921665

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