Question: 25. Porter & Co. is considering Projects S and L, whose cash ows are shown below. These projects are mutually exclusive, equally risky, and not


25. Porter & Co. is considering Projects S and L, whose cash ows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher IRR, how much value will be foregone? Note that under some conditions choosing projects on the basis of the IRR will cause $0.00 value to be lost. WACC = 10% Year: 0 1 2 3 4 CF52 $1,025 $650 $450 $250 $ 50 CFL: $1,025 $100 $300 $500 $700 . $6.93 . $2.26 $0.00 $3.31 $7.82 epow>
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