Consider the following projects. Project C0 C1 C2 C3 C4 C5 C6 A -2,000 +1,000 0 0 0 0 +2,000 B -3,000 +1,000 +1,000 +4,000 +1,000 +1,000 +2,000 C -4,000 +1,000 +1,000 0 +1,000 +1,000 +2,000 Assume...

Consider the following projects.

Assume that this firm’s  beta= 1.3  The expected market return is 12%.

The risk free rate is 2.5%.  This company can borrow debt at 7.5%.

 The firm has $5 billion in debt. It has 6 billion shares outstanding  at $5 price/shr.

The corporate tax rate (Tc) = 21%

Question: What is the NPV of project B ?