9. Bill plans to open a do-it-yourself dog-bathing center in a storefront. The bathing equipment will cost $160,000. Bill expects the after-tax cash inflows to be $40,000 annually for 7 years, after which he plans to scrap the equipment and retire to the beaches of Jamaica. Assume the required rate of return is 10%. What is the project's NPV?
10. What is the expected market return if the expected return on asset A is 16% and the risk-free rate is 7%? Asset A has a beta of 1.2.
You can use a financial calculator or excel to solve such questions. I'll tell you the formula in Excel. In Excel ...
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