a. Compute the risk-adjusted net present value for Windy Acres and Hillcrest Apartments.

Windy Acres Net Present Value $ ?

Hillcrest Apartments Net Present Value $ ?

b-1. Which investment should Mr. Backster accept if the two investments are mutually exclusive?

b-2 which investment shoukd Mr. Backster accept if the investments are not mutually exclusive and no capital rationing is involved?

I will need step by step explanation plus answers.

Mr. John Backster, a retired executive, desires to irvest a portion of his assets in rental property. He has narrowed his chaices to two apartment compleves, Windy Acres and Hillcrest Apartiments. The anticipated annual cash inflows from cach are as follows. Mr. Backster is likely to hold the apartment complex of his choice for about 25 years and wil use this period for decisicn-making purposes. Either apartment can be purchased for $160,000. Mc. Backster uses a risk-adjusted discourt rate approach when evaluating investments. His scale is related to the coefficient of variation (for other types of investrients, he a so considers other measurest) a. Compute the risk-adjusted net present value for Windy Acres and Hi crest A partments (Found "PV/ Factor" to 3 decimal plases. Do not round Intermedlate calculations. Round the final answers to nearest whols dellack) b.1. Which investment should Mr. Backster accept if the two investments are mutualy exclusive? Hillicrest Windy Acres Both None b.2. Which investment should Mr. Backster accept if the investments are not mutually exclusive and no cap tal rationing is involved? Windy Acres Hillarest Apartments Both None