Which project will you choose? Use the information to answer the following questions. A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown below:

	Year 0	Year 1	Year 2	Year 3	Year 4
Cashflow for S	-100	40	50	30	30
Cashflow for L	-100	10	10	50	90

Assume the company can get an unlimited amount of capital at that cost.

WACC	NPV (S)	NPV (L)
5%
10%
15%
20%
25%

If the companys cost of capital is 5% and the decision is made by choosing the project with the higher IRR, how much value will be forgone? (Hint: Complete the NPV profile)

Select one:

a. $ 4.01

b. $12.45

c. $20.80

d. $ 1.79

e. $29.89