$6.$ ABC Inc. is considering Projects S and L$,$ whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the shorter payback, some value may be forgone. How much value will be lost in this instance? Hint: First find the payback period of each project and determine the one with the shorter payback. Then find the NPV of each project. Use the NPV of the project with the shorter payback minus the other NPV$.$

WACC: $12\mathrm{.}25\%$

$01234$

CFS $-$$$950$ $$500$ $$800$ $$0$ $$0$

CFL $-$$$2,100$ $$400$ $$800$ $$800$ $$1,000$

$$0\mathrm{.}00$

$7.$ ABC Inc. is considering Projects S and L$,$ whose cash flows 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 forgone?

WACC: $8\mathrm{.}50\%$

$01234$

CFS $-$$$1,025$ $$650$ $$450$ $$250$ $$50$

CFL $-$$$1,025$ $$100$ $$300$ $$500$ $$700$

answer: $$30\mathrm{.}42$