ch 11 #10

Project X $178,000 Project Y $238,000 Project ZE $311,000 Initial investment (CFo) Year (t) Cash inflows (CFt) $84,000 73,000 57,000 63,000 60,000 $55,000 67,000 77,000 83,000 91,000 $90,000 90,000 90,000 90,000 90,000 Risk Classes and RADRs Risk Class Description Lowest risk Below-average risk Average risk Above-average risk Highest risk Risk adjusted discount rate (RADR 10.1% 13.2 15.1 19.0 22.1 IV