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Like most firms in its industry, Culinary Cafe uses a subjectivo risk assessment tool of its own design. The tool is a simple index by

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Like most firms in its industry, Culinary Cafe uses a subjectivo risk assessment tool of its own design. The tool is a simple index by which projects are ranked by level of perceived risk on a scale of 0-10. The scale is recreated in the following table, Risk index Required return 0 3.7% (current nisk-free rate) The NPV for project Pita is $ (Round to the nearest cont) 3.7% (current risk-free rate) 4.1 4.5 4.9 52 4. 5 6 7 8 5.3 5.7 (current IRR) 6.1 6.5 6.9 890 6.9. 7.3 7.7 The firm is analyzing two projects based on their RADRs. Project Pita requires an initial investment of $12,600 and is assigned a risk index of 5. Project Grape Leat requires an initial investment of $7,500 and is assigned a risk index of 9. The two projects have 6-year lives. Pitais projected to generate cash inflows of $4,700 per year. Grape Leal is projected to generate cash inflows of $3,800 per year. Use each project's RADR to select the botter project The NPV for project Pita is (Round to the nearest cent.)

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