Question: pls answer :) Tesar Chemicals is considering Projects S and L, whose eash flows are shown below. These projects are mutually exclusive, equally risky, and
Tesar Chemicals is considering Projects S and L, whose eash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates the NPV. If the decision is made by eboosing the projoet with the higher IRR rather than the one with the higher NPV, how much, if any, value will be forgone, i.e., whar's the chosen NPV versas the maxirmum possible NPV? Note that (1) "true value" is measured by NPV, and (2) under some conditions the choice of IRR vs. NPV will have no effect on the value gained of lost. \begin{tabular}{llllll} WACC: & 8.25% & & & & \\ & 0 & 1 & 2 & 3 & 4 \\ CFS & $1,100 & $550 & $600 & $100 & $100 \\ CFL & $2,700 & $650 & $725 & $800 & $1,400 \end{tabular} a. 580.06 b. 577.13 c. 597.64 d. 593.73 e. 581.04
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