You are a consultant to a large manufacturing corporation considering a project with the following net after-tax cash flows (in millionsof dollars):Years from Now01 to 10After-Tax CF-$ 36$ 12The project's beta is 1.5. Assuming rf = 4% and E(гM) = 12%Required:a. What is the net present value of the project? (Do not round intermediate calculations. Enter your answer in millions rounded to 2decimal places.)Net present valuemillionb. What is the highest possible beta estimate for the project before its NPV becomes negative? (Do not round intermediatecalculations. Round your answer to 3 decimal places.)Highest possible beta value

The project is to evaluate a new project for a large manufacturing corporation. The information…

Answered: You are a consultant to a large…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...

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