The company uses NPV to evaluate projects and normally takes 10% as a discount rate, as this reflects the return available elsewhere on house-building investments. In the present situation this appears to be a suitable rate for the private housing development, but not for the adventure park. After much research, the company has decided that the minimum required rate of return that they should expect on this riskier project is 18%. On this basis, the project's NPVs were calculated: Private housing development: Amusement park development: +QAR 733 000 +QAR 264 000 Year 0 1 2 3 Private house development (QARM) -10 - 5 + 7 +9 Adventure park (QARM) -10 - 8 +4 +6 456 +4 + 8 + 7 +9