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You are a consultant to a large manufacturing corporation that is considering a project with...

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Finance

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 After-Tax Cash Flow
0 50
110 16

The project's beta is 1.1.

a. Assuming that rf = 7% and E(rM) = 15%, 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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