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P12-1 Adjusting for Risk Docs R Us has performed a risk assessment of independent projects They adjust for project risk by raising the calculated IRR by 3% for low risk projects, leaving the IRR the same for moderate risk projects, and lowering the calculated IRR by 2% for high risk proiects. Without capital rationing, and given their cost of capital of 1 1%, which projects should Meds R Us accept? Why? Note that you will add 3% to the Project's IRR if it is low risk (making it look more favorable since it is, leave Average risk Projects. IRRs the same, and subtract 2% from the IRR for high risk Projects (making them less favorable since they are due to the risk) Risk Cost NPV $21,000 5,000 11% $17,000 $4,000 16% $15,000 $2,000 12% $14,000 $4,000 17% 4,000 $-1,000 9% High Average High 2