Tesar Chemicals is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates the NPV. If the decision is made by choosing the project with the higher IRR rather than the one with the higher NPV, how much, if any, value will be forgone, ie., what's the chosen NPV versus the maximum possible NPV? Note that (1) "true value" is measured by NPV and 2) under some conditions the choice of IRR vs. NPV will have no effect on the value gained or lost. WACC: 8.75% 0 1 2 3 4 CFS -$1,100 $550 $600 $100 $100 CFL -$2,700 $650 $725 $800 $1,400 $79.93 $70.65 $71.36 $88.49 $68.51 You work for Whittenerg Inc., which is considering a new project whose data are shown below. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t= 0. What is the project's Year 1 cash flow? Sales revenues, each year $67,750 Other operating costs $25,000 Interest expense $8,000 Tax rate 25.0% $22,849 $26,149 $32,063 O $20,818 $30,211