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3. 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.