You are a consultant to a large manufacturing corporation that is considering a project with the...

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	–40
1–10	14

The project's beta is 1.9.

a. Assuming that r_f = 6% and E(r_M) = 12%, what is the net present value of the project? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

b. What is the highest possible beta estimate for the project before its NPV becomes negative? (Round your answer to 2 decimal places.)

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Expert Solution

jeff jeffy answered 4 weeks ago

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