As a financial analyst, you are tasked with evaluating a capital-budgeting project. You were instructed to use the IRR method, and you need to determine an appropriate hurdle rate. The risk-free rate is 4%, and the expected market rate of return is 11%. Your company has a beta of 1.0, and the project that you are evaluating is considered to have risk equal to the average project that the company has accepted in the past.
Required:
1. According to CAPM, the appropriate hurdle rate would be .
Answers: 2
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What’s the present value of a perpetuity that pays $250 per year if the appropriate interest rate is 5%? $4,750 $5,000 $5,250 $5,513 $5,788what is the present value of the following cash flow stream at a rate of 8.0%, rounded to the nearest dollar? cash flows: today (t = 0) it is $750, after one year (t = 1) it is $2,450, at t = 2 it is $3,175, and at t=3 it is $4,400. draw a time line. $7,917 $8,333 $8,772 $9,233 $9,695
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As a financial analyst, you are tasked with evaluating a capital-budgeting project. You were instruc...
Biology, 23.01.2020 19:31
Biology, 23.01.2020 19:31