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What is the net present value of the project

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Reference no: EM133161847

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

Years

Annual Cash Flow

0

-93

1 - 10

13

Based on the behaviour of the firm's stock, you believe that the beta of the firm is 1.4. Assuming that the rate of return available on risk- free investments is 4% and that the expected rate of return on the market portfolio is 11%, what is the net present value of the project?

Reference no: EM133161847

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