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 B. 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. i Data Table Project A Project B Initial investment (CF) $18,000 $33,000 Project life 7 years 7 years Annual cash inflow (CF) $6,800 $10.900 Risk index 0.2 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. a. The net present value for project Ais $ (Round to the nearest cent.) The net present value for project B is $ (Round to the nearest cent.) Risk index 0.0 b. Discuss your findings in part (a), and recommend the preferred project. (Select from the drop-down menus.) Project is preferable to Project V, since the NPV of V is greater than the NPV of v 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 Required return (RADR) 8.9% (risk-free rate, R.) 7.8 8.7 9.6 10.5 11.4 12.3 13.2 14.1 15.0 15.9 Print Done