What is the present value of the cash flow assume the capm


A project has an expected cash flow of $1 million one year from now. The standard deviation of this cash flow is $250,000. If the expected return of the market portfolio is 10 percent, the risk-free rate is 5 percent, the standard deviation of the market return is 5 percent, and the correlation between this future cash flow and the return on the market is .5, what is the present value of the cash flow? Assume the CAPM holds.

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Finance Basics: What is the present value of the cash flow assume the capm
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