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Copyright © 2025 Pearson Education, Inc.Solutions to Chapter 13 Problems
13-1 NOPAT = (1 – 0.25)($8 million − $4 million − $2 million) = $1.5 million
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Copyright © 2025 Pearson Education, Inc.13-2 ea = 0.025 + 1.28(0.084) = 0.1325 or 13.25%
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Copyright © 2025 Pearson Education, Inc.13-3 Recommendations differ for Projects A and C. These differences occur because the WACC is indifferent to market volatility, whereas the CAPM strives to take market risk into account. This is the basic difference shown by the slope of the CAPM line in the diagram on page 548.
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