Assume the following information for firm Omega: Bonds = €30 million with yield to maturity = 8%; Stocks = €100 million; covariance of the stock returns with the market = 0

Beta = Covariance of stock returns with market / (Std dev of market)²
= 0.048 / 0.04
= 1.2

Cost of Equity = Risk-Free Rate + Beta * (Market Risk Premium)
= 6% + 1.2 * 7.5%
= 6% + 9%
Cost of Equity = 15%

Weighted Average cost of capital = 12.86769%

Cash Flow = 6 million

Present Value of Future Cash Inflows (PV) = C * {[1 - (1 + i)^-n] / i}
where C = Cash Flow
i = Weighted Average Cost of Capital = 12.86769%
n = number of years = 20 years

PV = 6000000 * {[1 - (1 + 0.1286769)^-20] / 0.1286769}
= 6000000 * (0.911160263 / 0.1286769)
= 6000000 * 7.080993267
PV =  42,485,959.6021044

NPV = PV of Cash Inflow - PV of Cash Outflow
= 42,485,959.6021044 - 40,000,000
NPV =  $2,485,959.6021044

Since the NPV is positive, therefore, the company should accept the project.