Asset valuation and risk cash inflows of $2,800 at the end of the first 4 year and $15,537 at the end of year 5. 9% on low risk assets, 14% on average assets, and 19% on high-risk assets.

a.Determine what should be paid for the asset if it is classified as(1) low-risk,(2) average-risk, and(3) high-risk. b.Suppose you areunable to assess the risk of the asset and wants to be certainthe deal is good. On the basis of your findings in part a, what is the mostyou shouldpay? Why? c. All else being thesame, what effect does increasing risk have on the value of anasset?