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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

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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? A little he help: This will be the difference between the the NPVs of S and Lif there's a conflict and they make the wrong decision WACC: 6.75% 0 1 2 3 4 -$1,025 $380 $380 $380 $380 CFS CFL -$2,150 $765 $765 $765 $765 Select one: $220.03 $214.44 $186.47 $182.74 $218.17

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