P12-13 (similar to) Question Help Risk classes and RADR 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? i Data Table - X a. The net present value for project X is $22000. (Round to the nearest cent.) (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 O Initial investment (CF) $180,000 $236.000 $307,000 Year (t) Cash inflows (CF) $78,000 $52,000 $94,000 66,000 66,000 94,000 59,000 75,000 94,000 61,000 81,000 94.000 62,000 93,000 94,000 AWN Risk Class Risk Classes and RADRs Description Risk adjusted discount rate (RADR) Lowest risk 10.3% Below-average risk 13.5 Average risk 15.7 Above-average risk 19.6 Highest risk 22.8 Print Done