Question

The Treasury bill rate is 3% and the market risk premium is 8%.

Project	Beta			Internal Rate of Return, %
P		0.85		14
Q		0.00		10
R		1.00		11
S		0.25		11
T		0.60		13

a. What are the project costs of capital for new ventures with betas of 0.60 and 1.15? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

b. Which of the capital investments shown above have positive (non-zero) NPV's? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)      

• Project Punanswered
• Project Qunanswered
• Project Sunanswered
• Project Tunanswered
• Project R

Answer 1