Risk-Adjusted NPV. Kyoto Laboratories, Inc., is contemplating a capital investment project with an expected useful life of 10 years that requires an initial cash outlay of $225,000. The company...

Risk-Adjusted NPV. Kyoto Laboratories, Inc., is contemplating a capital investment project with an expected useful life of 10 years that requires an initial cash outlay of $225,000. The company estimates the following data:

Annual Cash Inflows ($)                                Probabilities

0                                                              0.10

50,000                                                   0.20

65,000                                                   0.40

70,000                                                   0.20

90,000                                                   0.10

(a) Assuming a risk-adjusted required rate of return of 25 percent is appropriate for projects of this level of risk, calculate the risk-adjusted NPV of the project. (b) Should the project be accepted?