The Correct Opportunity Cost for a Project Is Determined to Be

question 109

Multiple Choice

The correct opportunity cost for a project is determined to be 15% and the project is expected to generate $1 million in cash flows at the end of the next four years after an initial outlay of $3 million.Based on this information, the project would plot:

• A)Above the security market line
• B)Below the security market line
• C)On the security market line
• D)On the security market line, with a Beta of 1.0