NOTE: When a firm has projects that differ in risk $($beta$)$ than the "average" for the company, then the firm's overall required return $($from Problem $2)$ isn't applicable. Each project needs to provide a return greater than or equal to its unique risk$-$adjusted required return. THE RATES CALCULATED FOR PROJECTS A $-$ D IN #$3$ ARE THE REQUIRED RETURNS FOR EACH FOR THE FOLLOWING:

Use for Problems $4-7.$ For each project, calculate the NPV$,$ IRR, profitability index $($PI$)$ and the payback period. For each capital budgeting decision tool, indicate if the project should be accepted or rejected, assuming that each project is independent of the others. Important Note: The venture capital folks, when considering payback period, have a firm maximum payback period of four years. This $4-$year payback period has no impact on other capital budgeting analysis techniques, each is to be considered on its own. In other words, yes, all cash flows need to be considered for NPV$,$ IRR, and PI$.$

Expected cash flows for the four potential projects that Baker is considering as shown below $($each project ends when its cash flows end$)$: $$

$\backslash$table$[[$Year$,$Project A$,$Project B$,$Project C$,$Project D$],[0,-$$$7,000,000,-$$$10,000,000,-$$$12,000,000,$$$7,200,000$

Project A Required Return: $8\mathrm{.}32\%$

Project B Required Return: $6\mathrm{.}96\%$

Project C Required Return: $9\mathrm{.}00\%$

Project D Required Return: $7\mathrm{.}98\%$