P$4$ Risk$-$adjusted discount rates: Basic. Country Wallpapers is considering investing in one of three mutually

exclusive projects, E$,$ F$,$ and G$.$ The firm's cost of capital, r$,$ is $15\%,$ and the risk$-$free rate, RF$,$ is $10\%.$ The firm has gathered

the basic cash flow and risk inder data for each project as shown in the following table.

a$.$ Find the net present value $($NPV$)$ of each project, using the firm's cost of capital. Which project is preferred in

b$.$ The firm uses the following equation to determine the risk$-$adjusted discount

c$.$ Use the RADR for each project to determine its risk$-$adjusted NPW$.$ 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?

Answer $-$ fill in the blue boxes below.

a$.$ Find the net present value $($NPV$)$ of each project, using the firm's cost of capital. Which project is preferred in

Firm's cost of capital

At the firm's current cost of capital only Project E has the hiqhest NPV$\text{'}$ so Project E is preferred.

b$.$ The firm uses the following equation to determine the risk$-$adjusted discount

c$.$ Use the RADR for each project to determine its risk$-$adjusted NPW$.$ Which project is preferable in this situation?

Firm's cost of capital

d$.$ Compare and discuss your findings in parts a and $c.$ Which project do you recommend that the firm accept?