A firm is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO wants to use the IRR criterion, while the CFO favors the NPV method. You were hired to advise the firm on the best procedure. If the wrong decision criterion is used, how much potential value would the firm lose? WACC: CFS CFL 6.50% 0 -$1,025 -$2,150 1 $380 $765 2 $380 $765 3 $380 $765 4 $380 $765

the IRR critcrida, while the CPO favors the NPY method. You were hirod lo advise the firm oe the best precedare. If obe wrong decisiza craterica is uted, baw moch potcetial value would the firm laie