Table 12.5
Nico Manufacturing is considering investment in one of two mutually exclusive projects X and Y which are described below. Nico Manufacturing's overall cost of capital is 15 percent, the market return is 15 percent and the risk-free rate is 5 percent. Nico estimates that the beta for project X is 1.20 and the beta for project Y is 1.40. 
-Calculate the NPV of projects X and Y assuming that the firm did not employ the RADR method and instead used the firm's overall cost of capital to evaluate projects X and Y. (See Table 12.5)
Definitions:
Stimulus-Response Relationships
The connection between a specific stimulus and the behavior or reaction it elicits.
Conscious
The state of being awake and aware of one's surroundings and mental processes.
Unconscious Thought
Thoughts and processes that occur without an individual's aware perception, influencing actions and feelings.
Conditioned Stimulus
An initially neutral stimulus that becomes associated with an unconditioned stimulus to elicit a conditioned response after repeated pairings.
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