You Are A Consultant To A Firm Evaluating An Expansion Of Its Current Business T

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On the basis of the behavior of the firm’s stock, you believe that the beta of the firm is 1.43. Assume that the rate of return available on risk-free investments is 4% and that the expected rate of return on the market portfolio is 15%.

What is the project IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

  IRR %  

What is the cost of capital for the project? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

  Cost of capital %  

Does the accept-reject decision using IRR agree with the decision using NPV? 

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