The Wolf company is examining two capital-budgeting projects with 5-year lives. The first, project A, is a replacement project; the second, project B, is a project unrelated to current operations. The Wolf Company uses the risk-adjusted discount rate method and groups projects according to purpose and then uses a required rate of return or discount rate that has been preassigned to the purpose or risk class. The expected cash flows for these projects are as follows:

Project A Project B

Initial Investment: 250,000 400,000

Cash flows:
Year 1 35,000 134,000
Year 2 40,000 134,000
Year 3 50,000 134,000
Year 4 90,000 134,000
Year 5 130,000 134,000

The purpose or risk classes and preassigned required rates of return are as follows:

Purpose Required Rate of Return

Replacement decision 12% 12%

Modification or expansion of existing product line 15% 15%

Project unrelated to current operations 18% 18%

research and development operations 20% 20%

Determine the project's risk-adjusted net present value.