What is the npv of the better project

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Reference no: EM13270310

Vanderheiden Inc. is considering two average-risk alternative ways of producing its patented polo shirts. Process S has a cost of $8,000 and will produce net cash flows of $5,000 per year for 2 years. Process L will cost $11,500 and will produce cash flows of $4,000 per year for 4 years. The company has a contract that requires it to produce the shirts for 4 years, but the patent will expire after 4 years, so the shirts will not be produced after 4 years. If cash inflows occur at the end of each year, and if Vanderheiden's cost of capital is 10 percent, What is the NPV of the better project?

Reference no: EM13270310

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