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…

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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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 0 1-10 After-Tax Cash Flow -45 12 The project's beta is 1.4. Required: a. Assuming that ry=6% and E(M) = 14%, what is the net present value of the project? Note: 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? Note: Round your answer to 2 decimal places. a. Net present value b. Highest beta
You are a consultant to a large manufacturing corporation considering a project with the following net after-tax cash flows (in millions of dollars): Years from Now Ө 1 to 10 After-Tax CF -$ 38 $ 12 The project's beta is 1.4. Assuming rf = 6% and E(rm) Required: = 16% a. What is the net present value of the project? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Net present value million b. What is the highest possible beta estimate for the project before its NPV becomes negative? (Do not round intermediate calculations. Round your answer to 3 decimal places.) Highest possible beta value
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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 0 1-10 After-Tax Cash Flow -50 16 The project's beta is 1.1. Required: a. Assuming that rf= 7% and E(M) = 15%, what is the net present value of the project? Note: 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? Note: Round your answer to 2 decimal places.
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 After-Tax Cash Now Flow -100 18 0 1-10 The project's beta is 1.1. Required: a. Assuming that rf= 5% and E(M) = 10%, what is the net present value of the project? Note: 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? Note: Round your answer to 2 decimal places. a. Net present value b. Highest beta 1.48
Ded 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 0 1-10 After-Tax Cash Flow -30 14 The project's beta is 1.6. a. Assuming that r = 48 and E(M)= 18%, what is the net present value of the project? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Net present value b. What is the highest possible beta estimate for the project before its NPV becomes negative? (Round your answer to 2 decimal places.) Highest beta
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Can you show me how this is done? Kepner Inc, is considering a capital investment project. that will provide annual cash flows of $31,248, requires an initial investment of $62,241, and the PV of cash flows is $106,796. What is the profitability index of the project? Round your answer 2 decimal places Selected Answer: 76 Correct Answer: 1.72 ± 0.01

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