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Consider Projects S and L, C flows are below. These are mutually exclusive, equal risk, aren't repeatable. WACC: 7.75% Year 0 1 2 3 4
Consider Projects S and L, C flows are below. These are mutually exclusive, equal risk, aren't repeatable.
WACC: 7.75%
Year 0 1 2 3 4
CFS $2,000 $1,500 $1,200
CFL $2,000 $800 $800 $800 $800
Answer the following questions:
- Calculate The NPV, IRR, and MIRR for Project S and L. (Show Excel functions below)
- If the decision is made to choose the project with a higher IRR, how much in value will be lost?
- What is the cause of conflicts between NPV and IRR?
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