11-27 J 10) capital,r, is 14.7%, and the risk-free rate. Re, is 9.9%. The firm has Risk-adjusted discount rates Basic Country Wallpapers is considering investing in one of three mutually exclusive projects, E, F, and G. The firm's cost gathered the following basic cash flow and risk index data for each project a. Find the nel present value (NPV) of each project using the firm's cost of capital. Which project is preferred in this situation? b. The firm uses the following equation to determine the risk-adjusted discount rate, RADR, for each project: - X Data Table RADR=RFRIX-RF) where Re-risk-free rate of return, RI = risk index for projects, and r = cost of capital Substitute each project's risk index into this equation to determine its RADR c. Use the RADR for each project to determine its risk-adjusted NPV. Which project is preferable in this situation? d. Compare and discuss your findings in parts (a) and (c). Which project do you recommend that the firm accept? a. Find the net present value (NPV) of each project using the firm's cost of capital (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) F G $19,400 $14,700 Initial investment (CFO) Year (1) Project (/) F $11,000 Cash inflows (CF) 55,600 3,900 5,300 2,200 1.01 1 2 3 4 Risk index (RI $6,000 6.000 6.000 6,000 1.84 $4,400 5,500 7,400 11.900 0.57 Print Done Press Continue to see more