Question: firm is considering Projects S and L, whose cash flows are shown below. These projects re mutually exclusive, equally risky, and not repeatable. The CEO

firm is considering Projects S and L, whose cash flows are

firm is considering Projects S and L, whose cash flows are shown below. These projects re mutually exclusive, equally risky, and not repeatable. The CEO wants to use the IRR riterion, while the CFO favors the NPV method. You were hired to advise the firm on the est procedure. If the wrong decision criterion is used, how much potential value would the irm lose? NACC: 6.75% 0 1 2 3 4 $380 $380 $380 $380 -Fs -$1,025 -$2,150 O a. $218.17 3 EFL $765 $765 $765 $765 O b. $214.44 O c. $220.03 O d. $186.47 O e. $182.74

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