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QUESTION
You are considering two mutually exclusive projects you want to use a risk adjusted rate (RADR) to help make your decision. Here is what we know
You are considering two mutually exclusive projects & you want to use a risk adjusted rate (RADR) to help make your decision. Here is what we know
- Cost of capital (call this the market return (Rm) in CAPM) is 12%
- Risk free rate (Rf) is 7%
Cash flows for each of your two projects are as follows
