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madreJ [45]
3 years ago
14

Using the capital asset pricing model (CAPM), Sun State determined that the required rate of return for a capital budgeting proj

ect it is evaluating is equal to 18 percent. If U.S. Treasury bonds yield 7 percent and the market risk premium is 5 percent, what is the project's beta coefficient?
Business
1 answer:
ANTONII [103]3 years ago
5 0

Answer:

2.2

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

18% = 7% + Beta × 5%

18% - 7% = Beta × 5%

11% = Beta × 5%

So, the beta would be

= 2.2

The (Market rate of return - Risk-free rate of return)  is also known as market risk premium and the same has applied.

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Answer:

The answer is:

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Explanation:

Garret Market uses a periodic inventory system (updates are made on a periodic basis) and in order to carry out this process correctly, the inventory should remain closed. Only in 2022 was the inventory closed, so it should be the most accurate. In 2021 the store remained fully opened and inventory was modified daily, so it should be the least accurate.

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2 years ago
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Answer:

The correct answer is letter "C": Involve farming out value chain activities presently performed in-house to outside specialists and strategic allies.

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Answer:

$740,366

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