Homework: Chapter 11 Homework Question 7. Problem 11-20 (similar to) Part 1 of 2 HW Score: 60%. 15 of 25 points O Points: 0 of 2 Save (Risk-adjusted discount rates and risk classes) The G. Wolfo Corporation is examining two capital-budgeting projects with 5-year lives. The first project A, is a replacement project; the second, project B, is a project unrelated to current operations. The G Wolle Corporation uses the risk-adjusted discount rate method and groups projects according to purpose, and then it uses a required rate of return or discount rate that has been preassigned to that purpose or risk class. The expected cash flows for these projects are given in the popup window. The purposelrisk classes and preassigned required rates of return are shown in the popup window. Determine each project'a rink-adjuntod not prosent value. What in the risk-adjusted NPV of project A? (Round to the nearest cent.) ated discount rates and risk classes) The G. Wolfe Corporation is examining two capital-budgeting projects with 5-year lives. The first project A, mt project; the seconde proiect B is a proiect unrelated to client. onerations The Wolfe Comoration uses the riskadiusted discount rate meth jects accord class. Th for these pr - X Data table rmine each h the pop! e risk-adjust and to the ne (Click on the following icon in order to copy its contents into a spreadsheet.) PROJECT A PROJECT B Initial investment - $280,000 - $300,000 Cash inflows: Year 1 $100,000 $110.000 Year 2 20,000 110,000 Year 3 30,000 110,000 Year 4 70,000 110,000 Year 5 100,000 110,000 Print Done VALT 19 * MMM r ct; the second, project B, is a project unrelated to current operations. The G. Wolfe Corporation uses the risk-adjusted discount rate ccording to purpose, and then it uses a required rate of return or discount rate that has been preassigned to that purpose or risk class In the sach -X Data table adjust che ne (Click on the following icon in order to copy its contents into a spreadsheet.) PURPOSE REQUIRED RATE OF RETURN Replacement decision 8% Modification or expansion of existing product line 15% Project unrelated to current operations 17% Research and development operations 20% Print Done