3. The potential projects that Baker is considering have the following expected cash flows. Each project has its own unique risk and as such, the beta on each project is given. Using the data from #2 for the risk-free rate and market risk premium, what is the required percentage return for each of the projects? Show the required returns to 2 decimals, that is XXXX%. You will use these rates when analyzing each project in the next part of the assignment, these are the required rates of return for Problems 4-6). (8 pts) #3 Beta Project A 0.8 Project B 1.3 Project C 1.4 Project D 1.0 Req. return (show work) Use for Problems 4-7. For each project, calculate the NPV, IRR, profitability index (PI) and the payback period. For each capital budgeting decision tool, indicate if the project should be accepted or rejected. assuming that each project is independent of the others. Important Note: The venture capital folks, when considering payback period, have a firm maximum payback period of four years. This 4-year payback period has no impact on other capital budgeting analysis techniques, each is to be considered on its own. In other words, yes, all cash flows need to be considered for NPV, IRR, and PI. Expected cash flows for the four potential projects that Baker is considering as shown below (each project ends when its cash flows end): Year 0 Project A -$11,500,000 Project B Project C Project D -$9,500,000 -$8,500,000-$7,250,000 1 $4,000,000 $3,500,000 $2,000,000 $2,000,000 2 $4,000,000 $3,500,000 $3,000,000 $2,500,000 3 $2,500,000 $2,750,000 $3,000,000 $2,000,000 4 $1,000,000 $1,300,000 $2,000,000 $2,000,000 5 $1,000,000 $700,000 $1,000,000 $1,500,000 6 $1,000,000 $500,000 $1,000,000 7 $1,000,000 $400,000 8 $500,000 $400,000 9 $500,000 10 $500,000