Epsilon Corp. is evaluating an expansion of its business. The cash-flow forecasts for the project are as follows: Cash Flows ($ millions) Years |-20 1-10 +10 The firm's existing assets have a beta of 1.4. The risk-free interest rate is 2% and the expected return on the market portfolio is 12%. What is the project's NPV?
Epsilon Corp. is evaluating an expansion of its business. The cash-flow forecasts for the project are as follows: Cash Flows ($ millions) Years |-20 1-10 +10 The firm's existing assets have a beta of 1.4. The risk-free interest rate is 2% and the expected return on the market portfolio is 12%. What is the project's NPV?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Epsilon Corp. is evaluating an expansion of its business. The cash-flow forecasts for the project are as
follows:
Cash Flows ($
Years
millions)
|-20
1-10
+10
The firm's existing assets have a beta of 1.4. The risk-free interest rate is 2% and the expected return on the
market portfolio is 12%. What is the project's NPV?
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