Answer Happy

You are a consultant to a large manufacturing corporation
considering a project with the following net after-tax cash flows
(in millions of dollars):
The project's beta is 1.9.
Assuming rf =
5% and E(rM) = 15%
Required:
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.)

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.)