Continued from previous question. If the companys cost of capital is 15%, what is the net present value of each Project? Based on NPV, which project will you choose?

Select one:

a. NPVS = $21.58, NPVL = $15.23, S

b. NPVS = $38.97, NPVL = $24.95, S

c. NPVS = $59.27, NPVL = $63.24, L

d. NPVS = $59.27, NPVL = $63.24, S

e. NPVS = $17.95, NPVL = $63.24, S

Continued from previous question. Which of the following statements is correct?

Select one:

a. The crossover rate should be between 15% and 20%.

b. If the WACC is smaller than the crossover rate, you will choose project S using the NPV method.

c. The crossover rate should be between 10% and 15%.

d. The crossover rate should be smaller than 10%.

e. If the WACC larger than the crossover rate, a conflict arises between the NPV and the IRR methods.

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: Year 0 Year 1 Year 2 Year 3 Year 4 Cashflow for S -200 80 150 50 10 Cashflow for L -200 10 10 120 210 Assume the company can get an unlimited amount of capital at that cost. WACC NPV (S) NPV (L) 5% 10% 15% 20% 25% Assume the company can get an unlimited amount of capital at that cost. If the company's cost of capital is 5%, what is the net present value of each Project? What's the profit foregone if IRR method is used? Select one: a. NPVS = $59.27, NPVL = $63.24, $3.97 b. NPVS = $59.27, NPVL = $63.24, $59.27 c. NPVS = $78.81, NPVL = $60.24, S18.57 O d. NPVS = $100.81, NPVL = $112.45, $11.25 e. NPVS = $63.66, NPVL = $95.02, $31.36