Metlock Inc. now has the following two projects available: Project -Initial CF After-tax CF1 After-tax CF2 After-tax CF3 1 -11,404.85 5,350 6,275 9,700 2 -3,243.10 3.850 3,250 = Assume that RF - 5.2 percent, risk premium 10.7 percent, and beta 1.3. Use the chain replication approach to determine which project Metlock Inc. should choose if they are mutually exclusive. (Round cost of capital and final answers to 2 decimal places, eg.17.35% or 2,513.25.) NPV1 generated over a six-year period $ NPV2 generated over a six-year period $ should be chosen. Attempts: 0 of 3 used Submit Answer SL
Metlock Inc. now has the following two projects available: Project -Initial CF After-tax CF1 After-tax CF2 After-tax CF3 1 -11,404.85 5,350 6,275 9,700 2 -3,243.10 3.850 3,250 = Assume that RF - 5.2 percent, risk premium 10.7 percent, and beta 1.3. Use the chain replication approach to determine which project Metlock Inc. should choose if they are mutually exclusive. (Round cost of capital and final answers to 2 decimal places, eg.17.35% or 2,513.25.) NPV1 generated over a six-year period $ NPV2 generated over a six-year period $ should be chosen. Attempts: 0 of 3 used Submit Answer SL
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
Problem 1PS
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Transcribed Image Text:Metlock Inc. now has the following two projects available:
Project
-Initial CF
After-tax CF1
After-tax CF2
After-tax CF3
1
-11,404.85
5,350
6,275
9,700
2
-3,243.10
3.850
3,250
=
Assume that RF - 5.2 percent, risk premium 10.7 percent, and beta 1.3. Use the chain replication approach to determine which
project Metlock Inc. should choose if they are mutually exclusive. (Round cost of capital and final answers to 2 decimal places, eg.17.35%
or 2,513.25.)
NPV1 generated over a six-year period
$
NPV2 generated over a six-year period
$
should be chosen.
Attempts: 0 of 3 used
Submit Answer
SL
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