Question: 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
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?
Answer just the dollar amount without the + or - sign. Round to two decimal places.
| WACC: | 6.75% | ||||
| 0 | 1 | 2 | 3 | 4 | |
| CFS | -$1,025 | $650 | $450 | $250 | $50 |
| CFL | -$1,025 | $100 | $300 | $500 | $700 |
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