Epsilon Corp. is evaluating an expansion of its business. The cash-flow forecasts for the project are as follows: Years 0 1-8 Cash Flow ($ millions) -120 17 The firm's existing assets have a beta of 1.6. The risk-free interest rate is 6% and the expected return on the market portfolio is 14%. What is the project's NPV? (Enter your answer in millions. A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV million

Epsilon Corp. is evaluating an expansion of its business. The cash-flow forecasts for the project are as follows: Years 0 1-8 Cash Flow ($ millions) -120 17 The firm's existing assets have a beta of 1.6. The risk-free interest rate is 6% and the expected return on the market portfolio is 14%. What is the project's NPV? (Enter your answer in millions. A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV million

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

Epsilon Corp. is evaluating an expansion of its business. The cash-flow forecasts for the project are as follows:
Years
0
1-8
Cash Flow
($ millions)
-120
17
The firm's existing assets have a beta of 1.6. The risk-free interest rate is 6% and the expected return on the market portfolio is 14%.
What is the project's NPV? (Enter your answer in millions. A negative answer should be indicated by a minus sign. Do not round
intermediate calculations. Round your answer to 2 decimal places.)
NPV ................ million

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