What is the risk-adjusted npv of project

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The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay of $12000 and will operate for 6 years. Project A will produce expected cash flows of $3000 per year for years 1 through 6 , whereas project B will produce expected cash flows of $4000 per year for years 1 through 6. Because project B is the riskier of the two projects, the management of Hokie Corporation has decided to apply a required rate of return of 17 percent to its evaluation but only a required rate of return 11 percent to project A. Determine each project's risk-adjusted net present value. What is the risk-adjusted NPV of project A?

Reference no: EM132036941

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