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):
The project's beta is 1.6.
Years from Now After-Tax Cash Flow
0 −65
1–10 15
1.Assuming that rf = 6% and E(rM) = 13%, what is the net present value of the project?
2. What is the highest possible beta estimate for the project before its NPV becomes negative?