PDF Annotate
0) Make sure to have a PDF version of a file ready on your computer.
1) Open your Moodle classroom, click "An an activity or resource."
2) Click "PDF Annotation."

3) Upload the PDF as you would any other file to Moodle.
4) Configure the options as necessary:

Our recommendations:
Vote/Likes- ON as this allows for easy, now effort feedback
Textbox- ON enables "on PDF" writing
Drawing- ON allows for easy highlighting
Save and print PDF- ON or OFF based on your preferences regarding saving materials
Save and print comments- ON or OFF based on your preferences; make sure students understand this before they participate
Allow personal notes- ON as this allows one to keep noted until the choose to make them public
Allow private comments- OFF to avoid potential conflicts. Respond to inappropriate comments via email.