Moses Manufacturing is attempting to select the best of three mutually exclusive projects, X, Y, and Z. Although all the projects have 5-year lives, they possess differing degrees of risk. Project X is in class V, the highest-risk class; project Y is in class II, the below-average-risk class; and project Z is in class III, the average-risk class. The basic cash flow data for each project and the risk classes and risk-adjusted discount rates (RADRs) used by the firm are shown in the following tables

a. Find the risk-adjusted NPV for each project.

b. Which project, if any, would you recommend that the firm undertake?

(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)

	Project X	Project Y	Project Z
Initial investment (CF 0CF0)	$182 comma 000182,000	$236 comma 000236,000	$311 comma 000311,000
Year (tt )	Cash inflows (CF Subscript tCFt)
1	80,000	59,000	86,000
2	67,000	60,000	86,000
3	62,000	80,000	83,000
4	63,000	81,000	86,000
5	57,000	92,000	86,000

Risk Classes and RADRs
Risk Class	Description	Risk adjusted discount rate (RADR)
I	Lowest risk	10.6%
II	Below-average risk	13.5
III	Average risk	15.6
IV	Above-average risk	19.4
V	Highest risk	22.3