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Please, complete parts a and b. Risk-adjusted discount ratesTabular After a careful evaluation of investment alternatives and opportunities, Masters School Supplies has developed a CAPM-type

image text in transcribedPlease, complete parts a and b.

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 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 $23,000 Project B $27,000 Data Table Initial investment (CF) Project life Annual cash inflow (CF) Risk index 6 years 6 years $6,400 0.6 $10,000 1.6 Risk index 0.0 All the firm's cash flows for each project have already been adjusted for taxes. a. Evaluate the projects using risk-adjusted discount rates. b. Discuss your findings in part (a), and recommend the preferred project. a. The net present value for project A is $. (Round to the nearest cent.) Required return (RADR) 6.9% (risk-free rate, RF) 8.0 9.1 10.2 11.3 12.4 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 13.5 14.6 15.7 16.8 17.9 Print Done Enter your answer in the answer box and then click Check Answer. ? 2 parts remaining Clear All Check

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