Which project should virus stopper accept

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Reference no: EM131312344

Virus Stopper Inc., a supplier of computer safeguard systems, uses a cost of capital of 12 percent to evaluate average-risk projects, and it adds or subtracts 2 percentage points to evaluate projects of more or less risk. Currently, two mutually exclusive projects are under consideration. Both have a cost of $200,000 and will last four years. Project A, a riskier-than-average project, will produce annual end-of-year cash flows of $71,104. Project B, of less than average risk, will produce cash flows of $146,411 at the end of Years 3 and 4 only. Which project should Virus Stopper accept?

Reference no: EM131312344

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