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Npv of the higher npv project

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Pansy Pants Co., a supplier of denim jeans, uses a cost of capital of 13 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 $ 350 and will last 4 years. Project A, a riskier-than-average project, will produce annual end of year cash flows of $ 90 . Project B, of less than average risk, will produce cash flows of $225 at the end of Years 3 and 4 only. List the NPV of the higher NPV project.

Reference no: EM131055643

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