E Homework: Chapter 11 Homework Question 13, P11-25 (si... Part 1 of 3 HW Score: 25%, 4 of 16 points Points: 0 of 1 Save Risk-adjusted discount ratesTabular After a careful evaluation of investment alternatives and opportunities, Masters School Supplies has developed a CAPM-type relationship linking a risk index to the required return (RADR), as shown in a the table. The firm is considering two mutually exclusive projects, A and B. Following are the data the firm has been able to gather about the projects. Project A Project B Initial investment (CFO) $22,000 $31.000 X Project life 7 years 7 years Data table Annual cash inflow (CF) $7,300 S9.200 Risk index 0.6 1.2 Risk index Required return (RADR) All the firm's cash flows for each project have already been adjusted for taxes. 0.0 6.6% (risk-free rate, Rp) a. Evaluate the projects using risk-adjusted discount rates. b. Discuss your findings in part (a), and recommend the preferred project. 0.2 7.4 0.4 8.2 0.6 9.0 a. The net present value for project A is $- (Round to the nearest cent.) . 0.8 9.8 1.0 10.6 1.2 11,4 1.4 12.2 1.6 13.0 1.8 13.8 2.0 14.6 83333333 Print Done