Virus Stopper Inc., a supplier of computer safeguard systems, uses a cost of capital of 9...

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Virus Stopper Inc., a supplier of computer safeguard systems,uses a cost of capital of 9 percent to evaluate average-riskprojects, and it adds or subtracts 3 percentage points to evaluateprojects of more or less risk. Currently, two mutually exclusiveprojects are under consideration. Both have a cost of $ 303 andwill last 4 years. Project A, a riskier-than-average project, willproduce annual end of year cash flows of $ 88 . Project B, of lessthan average risk, will produce cash flows of $ 227 at the end ofYears 3 and 4 only. To the nearest .01, list the NPV of the higherNPV project. Note, if the NPV is negative, place a - sign in frontof your answer. Do not use the $ symbol.

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Solution The NPV of the Project A in dollars 3571The NPV of the Project B See Answer

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Virus Stopper Inc., a supplier of computer safeguard systems,uses a cost of capital of 9 percent to evaluate average-riskprojects, and it adds or subtracts 3 percentage points to evaluateprojects of more or less risk. Currently, two mutually exclusiveprojects are under consideration. Both have a cost of $ 303 andwill last 4 years. Project A, a riskier-than-average project, willproduce annual end of year cash flows of $ 88 . Project B, of lessthan average risk, will produce cash flows of $ 227 at the end ofYears 3 and 4 only. To the nearest .01, list the NPV of the higherNPV project. Note, if the NPV is negative, place a - sign in frontof your answer. Do not use the $ symbol.