The Treasury bill rate is 2% and the market risk premium is 7%. Project Beta Internal Rate of Return, % P 0.90 10 Q 0.00 8 R 3.00 23 S 0.30 9 T 2.60 25 a. What are the project costs of capital for new ventures with betas of 0.65 and 1.65? b. Which of the capital investments shown above have positive (non-zero) NPV's?
The Treasury bill rate is 2% and the market risk premium is 7%.
| Project | Beta | Internal Rate of Return, % |
| P | 0.90 | 10 |
| Q | 0.00 | 8 |
| R | 3.00 | 23 |
| S | 0.30 | 9 |
| T | 2.60 | 25 |
a. What are the project costs of capital for new ventures with betas of 0.65 and 1.65?
b. Which of the capital investments shown above have positive (non-zero) NPV's?
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