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. Initial investment (CF) Project life Annual cash inflow (CF) Risk index Project A $18,000 6 years $8,000 0.4 Project B $27,000 6 years $10,500 1.4 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. X Data table Risk index 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 Required return (RADR) 7.3% (risk-free rate, RF) 8.2 9.1 10.0 10.9 11.8 12.7 13.6 14.5 15.4 16.3