Question: 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


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: Assume the company can get an unlimited amount of capital at that cost. If the company's 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. $12.45 b. $1.79 c. $20.80 d. $29.89 e. $4.01 Continued from previous question. Which of the following statements is correct? Select one: a. If the WACC is larger than the crossover rate, a conflict arises between the NPV and the IRR methods. b. The crossover rate should be smaller than 10%. c. The crossover rate should be between 10% and 15%. d. If the WACC is smaller than the crossover rate, you will choose project S using the NPV method. e. The crossover rate should be between 15% and 20%
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