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Question Help Risk-adjusted discount rates-Basic Country Wallpapers is considering investing in one of three mutually exclusive projects, E, F, and G r, is 14.7 %,

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Question Help Risk-adjusted discount rates-Basic Country Wallpapers is considering investing in one of three mutually exclusive projects, E, F, and G r, is 14.7 %, and the nisk-free rate, R, is 10 4% The firm has gathered the following basic cash flow and risk index data for each project a. Find the net present value (NPV) of each project using the firm's cost of capital Which project is preferred in this situation? b. The firm uses the following equation to determine the risk adjusted discount rate, RADR, for each project / The firm's cost of capital, RADR R RIx (-R) where Re risk free rate of return, RI, risk index for project /, and r cost of capital Substitute each project's risk index into this equaton to determine its RADR 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? a. Find the net present value (NPV) of each project using the firm's cost of capital Data Table (Cick on the icon located on the top-right comer of the data table below in order to copy ts contents into a spreadsheet) Inco Project (/) E G Initial investment (CFo) $14,500 $11,000 $19,300 Cash inflows (CF Year () 1 $6200 $5800 $4 300 5,400 7.800 12.000 0 62 6,200 6,200 6.200 4,500 Press Continue to see more 3 5,100 2,000 Risk index (R 14 Parts 1.83 097 remaining

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