Question: Both projects are for 4 years. Project S has an initial outlay of $1025 and project D has an initial outlay of 2150. Project S

Both projects are for 4 years. Project S has an initial outlay of $1025 and project D has an initial outlay of 2150. Project S has annual cash flows of $380 for 4 years. D has annual cash flows of $765 for 4 years. Applicable WACC is 6%.

CEO wants to use the IRR criterion while cfo favors NPV method. You were hired to advise the firm on the best procedure. If the wrong criterion is used, how much potential value would the firm lose?

A. 209$

B.177$

C.198$

D.230$

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