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Estimating the market risk premium and NPV

If the average annual rate of return for common stocks is 11.7%, and for treasury bills it is 4.0%, what is the market risk premium?

What is the net present value (NPV) of the following cash flows at a discount rate of 9%?

t=0 -250,000
t=1, 100,000
t=2, 150,000
t=3, 200,000

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If the average annual rate of return for common stocks is 11.7%, and for treasury bills it is 4.0%, what is the market risk ...

Solution Summary

There are two problems. Solution to first problem calculates the market risk premium. Solution to second problem depicts the methodology to calculate the NPV in the given case.

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