7. Project A's initial cost is $2,000, and its cash flow at time 1 has the following probability distribution: Probability Cash Flows .3 1,000 .4 3,000 .3 4,000 a. If the risk-free rate is 5 percent and expected market rate of return is 10 percent, and the project's beta is 2, what is the NPV of the project? b. If the beta of project B is 0, so that its cash flow is $2,500 with certainty, how much initial cost is needed for project B for the analyst to be indifferent between project A and B