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percent The proc e ss the theolog o s Amis conde determine the most n a a proact which seebed below The cost of capital is 18
Table 12.2 A firm is considering investment in a capital project which is described determine the risk adjusted discount rate
in a capital project which is described below The firms cost of capital is 18 percent and the risk-free rate is 6 percent. T
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Answer #1

RADR = risk free rate+(risk index*(cost of capital-risk free rate)

RADR = 6%+(1.5*(18%-6%))

RADR = 6% + (1.5*12%)

RADR = 6% + 18%

RADR = 24%

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