What is the highest possible beta estimate for the project

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

Years from Now After-Tax Cash Flow

0 -7

01-10 18

The project's beta is 1.3.

a. Assuming that rf = 5% and E(rM) = 13%, what is the net present value of the project?

b. What is the highest possible beta estimate for the project before its NPV becomes negative?

Reference no: EM132403188

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