The problem is in the attachment Document Preview: Please provide explanation so that I understand how to work this problem independently. Risk- adjusted discount rate--- Basic Country Wallpapers is...

Please provide explanation so that I understand how to work this problem independently. Risk- adjusted discount rate--- 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 index data for each project, as shown in the following table. Find the net present value (NPV) of each project using the firm’s cost of capital. Which project is preferred in this situation? The firm uses the following equation to determine the risk- adjusted discount rate, RADRj, for each project j: RADRj = RF + [RIi X (r – RF)] Where RF= risk- free rate of return RIj= risk index for project j r= cost of capital Substitute each project’s risk index into this equation to determine its RADR. Use the RADR for each project to determine its risk- adjusted NPV. Which project is preferable in this situation? Compare and discuss your findings in parts a and c. Which project do you recommend that the firm accept? Hint Part A wants you to find the NPV for each project. Let Excel do this for you. When using the NPV function it asks for the rate first, then all the cash flows, STARTING in YEAR 1. Once you get that, do not forget to subtract out the initial cash you had to outlay.  As always, if you can only choose one project, you take the one with the highest NPV.  For Part B, you use the formula provided to determine the risk adjusted rates. What they are trying to show you is that each project carries a different amount of risk and the higher the risk the higher the rate required.  For Part C you use those rates to determine the NPV now of the projects. You will find out if risk impacts your decision of which project to choose.  That is what Part D is asking you. Did risk make you change your mind?