### Calculate 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