Pettway Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher IRR, how much value will be foregone? (Hint: As discussed in the mini-lecture, NPV and IRR dont necessarily lead to the same decision if projects are mutually exclusively. Under some conditions choosing projects on the basis of the IRR will cause dollar value (Net Present Value) to be lost.)

WACC = 12%

Year: 0 1 2 3 4

CF_S: -$1,025 $375 $380 $385 $390

CF_L: -$2,153 $750 $759 $768 $777

A. $21.49

B. $33.69

C. $37.39

D. $27.51

E. $15.57