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P 4 Risk - adjusted discount rates: Basic. Country Wallpapers is considering investing in one of three mutually exclusive projects, E , F , and

P4 Risk-adjusted discount rates: Basic. 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%, and the risk-free rate, RF, is 10%. The firm has gathered the basic
cash flow and risk index data for each project as shown in the following table.
a. Find the net present value (NPV) of each project, using the firm's cost of capital. Which project is preferred in this
b. The firm uses the following equation to determine the risk-adjusted discount
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?
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