Initial investment (CF) Year (t) 1 2 3 4 Beta E -$15,000 Project () F -$11,000 Cash inflows (CF:) G -$19,000 $6,000 $6,000 $ 4,000 6,000 4,000 6,000 6,000 5,000 8,000 6,000 2,000 12,000 1.80 1.00 0.60 a. Find the NPV of each project, using the firm's cost of capital. Which project is preferred in this situation? b. The firm uses the following equation to determine the risk-adjusted discount rate, RADR, for each project j: RADR;= Rp+j (rm - RF) Where RF Bj RADRj = risk-free rate 2% = beta of project ; = risk-adjusted discount rate for project; I'm expected return on market portfolio 10% Substitute each project's beta into this equation to determine its RADR. c. Use the RADR for each project to determine its risk-adjusted NPV. Which project is preferable in this situation? d. Compare and discuss your findings in parts a and c. Which project do you recommend that the firm accept?