Please do not forget the graph . Thank you . I give thumbs ups .

The risk-adjusted discount rate (RADR) approach recognizes that different investment Moreover, based on the risk profile of an individual project, the rate of return used to discount the project's expected cash lows can be adjusted to accommodate the specific riskiness of that specific project. This generally involves addinga project-specific risk premium to the market's risk-free rate to adjust the discount rate used to discount the proposed project's expected future cash flows and determine the project's expected net present value. projects exhibit different risk profiles. In your role as a financial analyst, you've been tasked with evaluating your company's investment projects. If you believe that a specific investment project exhibits lower risk than the average risk of the firm's other projects, then you would want to use a discount rate that is value (NPV) than the firm's average cost of capital when computing the project's net present Consider the case of Fantastique Fantom Costume Company: Fantastique Fantom Costume Company is owned 100% by private shareholders and carries no debt on its books. The company's beta is estimated to be 1.0. The company uses a risk-free rate of 9%, and the market expects a return of 13% The graph below plots the security market line (SML). Based on your understanding of the capital asset pricing model and the risk-adjusted discount rate approach toward project risk, plot the following points on the graph * Use point A (orange square) to show the rate of return the company should require on a project with average risk * Use point B (green triangle) to show the rate of return the company should require on a project with a beta of 0.80. Tool tip: Mouse over the points on the graph to see their coordinates REQUIRED RATE OF RETURN Perce 12 10 00 02 046 08 10 12 1,4 16 18 2.0 PROJECT BETA Suppose the company is analyzing a project that requires a net investment of $8.0 million. The and is forecasted to generate annual net cash fiows of $24.0 million each year for the next five years. The project looks very promising r tne project is consioerea to oe or average isK, Its NPV would be: r the project is consioerea to nave a ower risk tnan the average risk of projects in the company, and has a beta of 0.80, then the project's NPV would be: O $78.09 milion O $13.03 milion O $76.41 miltion O $13.50 million O -$8.00 million O $76.41 million O $78.09 illion O-$8.00 million 0 -$8.00 million