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HW help please with explanations Which project will you choose? Use the information to answer the following questions. A company is analyzing two mutually exclusive

HW help please with explanations

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Which project will you choose? 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 o Year 1 Year 2 Year 3 Year 4 Cashflow for S -100 40 50 30 30 Cashflow for L -100 10 10 50 90 Assume the company can get an unlimited amount of capital at that cost. WACC NPV (S) NPV (L) 5% 10% 15% 20% 25% What is the internal rate of return (IRR) for Project S? Project L? Assume the WACC is 10%, which project will you choose based on IRR method? Select one: a. 20.12%, 18.91%, S o b. 22.07%, 17.54%, L c. 19.93%, 15.21%, S d. 19.93%, 17.83%, S e. 10.00%, 22.55%, L Continued from previous question. If the company's cost of capital is 5% and the decision is made by choosing the project with the higher IRR, how much value will be forgone? (Hint: Complete the NPV profile) Select one: a. $29.89 b. $20.80 c. $ 1.79 d. $ 4.01 e. $12.45 Continued from previous question. Which of the following statements is correct? Select one: a. If the WACC is larger than the crossover rate, a conflict arises between the NPV and the IRR methods. 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 smaller than 10%. d. The crossover rate should be between 15% and 20%. e. The crossover rate should be between 10% and 15%

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