Projects S and L, whose cash flows are shown below, are mutually exclusive, equally risky, and not repcutable. Hooper Inc. is considering which of these two projects to undertake. If the decision is made by choosing the project with the higher IRR, how much value will be forgone? Note that under certain conditions choosing projects on the basis of the IRR will not cause any value to be lost because the project with the higher IRR will also have the higher NPV, so no value will be lost if the IRR method is used. r: 12.00% Year 0 CFS-$2,050 $750 $760 $770 $780 CFL -$4,300 $1,500 $1,518 $1,536 $1,554 4 O a. S110.84 b. S205.36 OC. $149.36 Od. 164.29 S61.03 Last month, Standard Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project took place, the Federal Reserve changed interest rates and therefore the firm's cost of capital (1) The Fed's action did not affect the forecasted cash flows. By how much did the change in the r affect the project's forecasted NPV? Note that a project's expected NPV can be negative, in which case it should be rejected. Old r. 10.00% Year 0 Newr 1 $410 12.00% 2 $410 3 Cash flows --$1,000 $410 03. -$23.13 Ob -$20.93 OC-$17.69 Od-$22.03 e-S34.86