Question: A company is considering two equally risky, mutually exclusive projects A and B The cost of capital is 10%. The CEO wants to use the

A company is considering two equally risky, mutually exclusive projects A and B The cost of capital is 10%. The CEO wants to use the IRR criterion while the CFO favors the NPV method of the CEO's preferred criterion is used, how much value will the firm lose as a result of this decision? Year 0 Project A -54.000 2.000 2.100 2.200 Project B 52000 1000 1 2 1.100 1200 A company is considering two equally risky, mutually exclusive projects A and B The cost of capital is 10%. The CEO wants to use the IRR criterion while the CFO favors the NPV method of the CEO's preferred criterion is used, how much value will the firm lose as a result of this decision? Year 0 Project A -54.000 2.000 2.100 2.200 Project B 52000 1000 1 2 1.100 1200

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