What is the net present value of the project

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Question - 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

+16

On the basis of the behavior of the firm's stock, you believe that the beta of the firm is 1.50. Assuming that the rate of return available on risk-free investments is 5% and that the expected rate of return on the market portfolio is 13%, what is the net present value of the project?

Reference no: EM133070366

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