Country Wallpapers is considering investing in one of three mutually exclusive projects, E, F, and G. The firm's cost of capital, r, is 15.4 %, and the risk-free rate, R_F, is 9.6 %. The firm has gathered the following basic cash flow and risk index data for each project:

Using the firm's cost of capital, what is the net present value for Project E?

Using the firm's cost of capital, what is the net present value for Project F?

Using the firm's cost of capital, what is the net present value for Project G?

Which project is preferred in this situation? Project .... , with the highest NPV, is preferred.

The firm uses the following equation to determine the risk-adjusted discount rate, RADR_j, for each project j:

RADR_j = R_F + RI_j x (r - R_F)

where R_F = risk-free rate of return, RI_j = risk index for project j, and r = cost of capital.

What is the RDAR for project E? (Round this percentage to two decimal places, and do not include '%' sign in your response).

What is the RDAR for project F? (Round this percentage to two decimal places, and do not include '%' sign in your response).

What is the RDAR for project G? (Round this percentage to two decimal places, and do not include '%' sign in your response).

Use the RADR for each project to determine its risk-adjusted NPV. (Hint: Make sure to enter negative signs where appropriate).

What is the risk-adjusted net present value for project E? (Round to two decimal places, and do not include '$' sign in your answer.)

What is the risk-adjusted net present value for project F? (Round to two decimal places, and do not include '$' sign in your answer.)

What is the risk-adjusted net present value for project G? (Round to two decimal places, and do not include '$' sign in your answer.)

Which project is preferable in this situation? Project ... will be preferable.

E $15,000 Initial investment (CF) Year (t ) 1 2 3 4 Risk index (RI) $5,500 5,500 5,500 5,500 1.77 Project (j) F G $11,000 $18,800 Cash inflows (CF) $6,500 $3,900 3,900 6,200 5,200 7,500 2,500 12,900 1.04 0.56