CBA Company is considering two mutually exclusive projects, A and B$.$ The company typically measures the beta of any investment project that it undertakes to calculate a risk$-$adjusted discount rate using the CAPM. Currently the risk$-$free rate is $7\%$ and the expected return on the market portfolio is $12\%.$ Use the following project data to determine:

Project A Project B

Initial Investment $($CFo$)--$$$15,000--$$$20,000$

Project Life $3$ years $3$ years

Annual cash Flows $($CF$)$ $$7,000$ $$10,000$

Project Beta $0\mathrm{.}41\mathrm{.}8$

a$.$ Ignoring any differences in risk and assuming that the firm$$s cost of capital is $10\%$; calculate the NPV for each project.

b$.$ Use NPV to evaluate the projects, using risk$-$adjusted discount rates $($RADRs$)$ to account for risk.

c$.$ Compare, contrast and explain your findings in parts a and b

Please provide the follwing information with it :

$-$Identify and record the unknown which the question is asking you to solve

$-$ Identify and record the relevant equation$($s$)$ that is $($are$)$ necessary to help you solve the problem, using only letters and symbols.

$-$ Rearrange the equation$($s$)$ if necessary to solve the problem

$-$ Substitute the numbers into the equation$($s$)$ and solve the problem using the problem using the equation