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(Risk-adjusted NPV)The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay of $10,000 and will operate for 7 years. Project A will produce expected cash flows of $5,000 per year for years 1 through 7, whereas project B will produce expected cash flows of $6,000 per year for years 1 through 7. 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 12 percent to project A. Determine each projects risk-adjusted net present value What is the risk-adjusted NPV of project A? $(Round to the nearest cent.) What is the risk-adjusted NPV of project B? $(Round to the nearest cent.)

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FIVE (Autosaved) Microsoft Word File Home nert Page Layout Reterences Mallings Review ew as cut Find- Replace Select Arial Copy B ly, alrcx,x a-里, A. :-, a-田. | n Normal nNo Spaci Paste Heading 1 Heading 2 , St Title Subtitle Subtle Ern Format Painter Clipboard Font Paragraph Styles Editing 12 16 SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE PROJECTA NPVE PV OF ALL CASHINFLOWS-INITIAL INVESTMENT NPV-(5000 X PVIFA@12%, 7 YEARS)-10000 NPV (5000 X 4.563757)-10000 NPV OF PROJECTA 12818.79 PROJECT NPV= (6000 X PVIFA@17%, 7 YEARS)-10000 NPV (6000 X 3.922380)-10000 NPV OF PROJECT B= 13534.28 Pa ds: 5,522 | ψ English (india 140% 03-10-2018

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