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( Risk - adjusted NPV ) The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay of $ 1 5 ,

(Risk-adjusted NPV) The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay
of $15,000 and will operate for 8 years. Project A will produce expected cash flows of $4,000 per year for years 1
through 8, whereas project B will produce expected cash flows of $5,000 per year for years 1 through 8. Because project
B is the riskier of the two projects, the management of Hokie Corporation has decided to apply a required rate of return
of 17 percent to its evaluation but only a required rate of return 9 percent to project A. Determine each project's risk-
adjusted net present value.
What is the risk-adjusted NPV of project A?
(Round to the nearest cent.)
What is the risk-adjusted NPV of project B?
(Round to the nearest cent.)
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