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 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% 5% 10% 15% 20% 25% 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 Ob $20.80 OCS 4.01 O d. S 1.79 Oe O e S12.45 Continued from previous question. Which of the following statements is correct? Select one O a. The crossover rate should be between 10% and 15%. . . O b. The crossover rate should be between 15% and 20% O c. The crossover rate should be smaller than 10% O d. If the WACC is larger than the crossover rate, a conflict arises between the NPV and the IRR methods. Oe. If the WACC is smaller than the crossover rate, you will choose project S using the NPV method. Polk Products is considering an investment project with the following cash flows: Year o Year 11 Year 2 Year Year 4 Year Cashflow -100 90 -25 30 The company's cost of capital is 10%, and it can get an unlimited amount of capital at that cost. What is the modified internal rate of return (MIRR) for the Project? Select one: a 8.54% b.10.1895 O c. 15.77% Od 8.0396 Oe 10.80%