Solutions to Chapter 13 Problems
13-1 NOPAT = (1 – 0.25)($8 million − $4 million − $2 million) = $1.5 million
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,13-2 ea = 0.025 + 1.28(0.084) = 0.1325 or 13.25%
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, 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.
Copyright © 2025 Pearson Education, Inc.
13-1 NOPAT = (1 – 0.25)($8 million − $4 million − $2 million) = $1.5 million
Copyright © 2025 Pearson Education, Inc.
,13-2 ea = 0.025 + 1.28(0.084) = 0.1325 or 13.25%
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.
Copyright © 2025 Pearson Education, Inc.
