Question: 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

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: 10.75% 0 -$1,150 -$2,300 CFS CFL O a. $0.00 O b. $35.25 O c. $162.66 O d. $31.83 O e. $245.94 1 $415 $795 $795 $795 2 3 4 $415 $415 $415 $795

A. fim is considering Projects S and t. wbowe cach flows are shown befow, Thoso projects are mutually exclusive, equally risky, and not tepeatable The CEO wants to use the IRR criterion, while the CFO favon the NPV method. You were hired to advise the firm on the best procodure. If the wrong docision criterion is ased, how much potentinl value would the firm lose? b. 13525 c. 1162.06 d 531.82 e. 524594

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