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. Project A Project B Initial investment (CF) $18,000 $31,000 Project life Annual cash inflow (CF) $7,100 $9,000 Risk index 0.6 1.6 7 years 7 years 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 A is $ (Round to the nearest cent.) The net present value for project Bis $ (Round to the nearest cent.) b. Discuss your findings in part (a), and recommend the preferred project. (Select from the drop-down menus.) Project is preferable to Project since the NPV of is greater than the NPV of A or B -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) 6.8% (risk-free rate, RF) 7.7 8.6 9.5 10.4 11.3 12.2 13.1 14.0 14.9 15.8 Print Done