Table 12.3 Tangshan Mining Company Is Considering Investment in One of Two

Multiple Choice

Table 12.3
Tangshan Mining Company is considering investment in one of two mutually exclusive projects M and N which are described below. Tangshan Mining's overall cost of capital is 15 percent, the market return is 15 percent and the risk-free rate is 5 percent. Tangshan estimates that the beta for project M is 1.20 and the beta for project N is 1.40.
-Using the risk-adjusted discount rate method of project evaluation, the NPV for project N is ________. (See Table 12.3)

A) $166,132.
B) $122,970.
C) $85,732.
D) none of the above.