A firm is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO wants to use the IRR criterion, while the CFO favors the NPV method. You were hired to advise the firm on the best procedure. If the wrong decision criterion is used, how much potential value would the firm lose?

WACC:	11.00%
	0	1	2	3	4
CFS	-$1,150	$415	$415	$415	$415
CFL	-$2,300	$795	$795	$795	$795

a. $28.93

b. $243.73

c. $26.06

d. $0.00

e. $158.61

Your company, CSUS Inc., is considering a new project whose data are shown below. The required equipment has a 3-year tax life. Under the new law, the equipment used in the project is eligible for 100% bonus depreciation, so the equipment will be fully depreciated at t = 0. The equipment has no salvage value at the end of the projects life, and the project does not require any additional operating working capital. Revenues and operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 cash flow?

Equipment cost	$70,000
Sales revenues, each year	$42,100
Operating costs	$28,500
Tax rate	25.0%

a. $13,600

b. $16,033

c. $17,000

d. $10,880

e. $10,200