Should hartley make the investment

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Reference no: EM131337146

The Hartley Hotel Corporation is planning a major expansion. Hartley is financed 100 percent with equity and intends to maintain this capital structure after the expansion. Hartley's beta is 0.9.

The expected market return is 16 percent and the risk-free rate is 10 percent. If the expansion is expected to produce an internal rate of return of 17 percent, should Hartley make the investment?

Reference no: EM131337146

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