Country Wallpapers is considering investing in one of three mutually exclusive projects, E$,$ F$,$ and G$.$ The firm$$s cost of capital, r$,$ is $10\%,$ and the risk$-$free rate, RF$,$ is $2\%.$ The firm has estimated each project$$s cash flow and each project$$s beta, as shown in the following table.

Project $($j$)$

E F G

Initial investment $($CF$0)-$$$15,000-$$$11,000-$$$19,000$

Year $($t$)$ Cash inflows $($CFt$)$

$1$ $$6,000$ $$6,000$ $ $4,000$

$26,0004,0006,000$

$36,0005,0008,000$

$46,0002,00012,000$

Beta $1\mathrm{.}801\mathrm{.}000\mathrm{.}60$

a$.$ Find the NPV of each project, using the firm$$s cost of capital. Which project is preferred in this situation?

b$.$ The firm uses the following equation to determine the risk$-$adjusted discount rate, RADRj, for each project j:

RADRj $=$ RF $+$ Bj x $($rm $-$RF$)$

Where

RF $=$ risk$-$free rate $2\%$

Bj $=$ beta of project j

RADRj $=$ risk$-$adjusted discount rate for project j

rm $=$ expected return on market portfolio $10\%$

Substitute each project$$s beta into this equation to determine its RADR.

c$.$ Use the RADR for each project to determine its risk$-$adjusted NPV$.$ Which project is preferable in this situation?

d$.$ Compare and discuss your findings in parts a and c$.$ Which project do you recommend that the firm accept?

Please show your work $($include excel formulas$).$ Thank you.