What is the risk adjusted npv of the project

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Company Y has conducted a risk assessment on a project it is considering.

The company adjusts its WACC by adding a risk premium based on the coefficient of variation of a project as follows:

CV Adjustment
0%-50% -1%
50%-70% 0%
71%-90% 3%

The project has a coefficient of variation of 80% associated with it.

The project has the following net cash flows associated with it:

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

-R100 R50 R20 R30 R40 R60

The company has a WACC of 15%. What is the risk adjusted NPV of the project?

Reference no: EM132554732

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