JTR Manufacturing is considering two (2) mutually exclusive investments. The company wishes to use a CAPMType riskadjusted discount rate (RADR) in its analysis. JTR’s managers believe that the appropriate market rate of return is 10%, and they observe that the current riskfree rate of return is 5%. Cash flows associated with the two (2) projects are shown in the table below
Project X $110,000 
Project Y $120,000 

YEAR 
NET CASH INFLOWS (NCF_{t}) 

1 
$40,000 
$32,000 
2 
$40,000 
$42,000 
3 
$40,000 
$48,000 
4 
$40,000 
$56,000 
Answer the following questions:
Use a riskadjusted discount rate approach to calculate the net present value of each project, given that project X has a RADR factor (Risk Index) of 1.20 and project Y has an RADR factor (Risk Index) of 1.4. Please note that the RADR factors are similar to project betas.
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