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Arrow Electronics is considering Projects S and L which are mutually exclusive, equally risky, and not repeatable. Project S has an initial cost of $1
Arrow Electronics is considering Projects S and L which are mutually exclusive, equally risky, and not repeatable. Project S has an initial cost of $1 million and cash inflows of $370,000 for 4 years, while Project L has an initial cost of $2 million and cash inflows of $720,000 for 4 years. The CEO wants to use the IRR criterion, while the CFO favors the NPV method, using a WACC of 8.02%. what is the difference between the npvs for these two projects?
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