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. If the CEOs preferred criterion is used, how much value will the firm lose as a result of this decision? Year 0 1 Project A -54.000 2000 2.100 2 200 2.300 2 Project B -$2.000 1.000 1100 1.200 1.300

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