1 3 Powerful Wind, Inc. is a wind turbine manufacturer that is considering three investment projects: I, II, and III, that will cost $2,500,000, $2,300,000, and $3,700,000, respectively. The projects have an expected life of three, five, and seven years, correspondingly. The firm's Vice President of Finance has estimated the probability distribution for each project's first after-tax cash flow (ATCF) as shown in the following table: Scenario Probability Project I ATCF Project II ATCF Project III ATCF 10% $1,000,000 $550.000 $350,000 2 20% $1,150,000 $750,000 $600.000 40% $1,250,000 $950,000 $850,000 4 20% $1,350,000 $1,150,000 $1,100.000 5 10% $1,500,000 $1,350,000 $1,350,000 The Vice President of Finance uses the risk-adjusted discount technique to evaluate investment projects. He allocates risk premiums based on the coefficient of variation of each project's after-tax cash flows according to the following table: Coefficient of Variation Risk Premium 0.0 -2.00% 0.2 0.00% 0.3 2.00% 0.4 4.00% 0.5 6.00% Each project's after-tax cash flows are expected to grow at an annual rate of inflation of 3%. a) Determine the expected cash flow, standard deviation, and coefficient of variation of each project in Year 1. b) If the firm's WACC is 15%, what is the appropriate risk-adjusted required rate of return of each project? c) Using the appropriate discount rates, determine the payback period, discounted payback period, NPV, PI, IRR, and MIRR for each project