The Treasury bill rate is 5% and the market risk premium is 7%. What are the pro

Question

The Treasury bill rate is 5% and the market risk premium is 7%.

What are the project costs of capital for new ventures with betas of .70 and 1.65? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Which of the following capital investments have positive NPVs? (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 Beta Internal Rate of Return, %        P 0.95       11                    Q 0       14                    R 3.00     27                    S 0.35       15                    T 2.30       29            

Explanation / Answer

project S gives higher returns

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