Your boss, the chief financial officer (CFO), has just handed you the estimated cash flows for two proposed projects: Project L and Project S. Both projects have 3-year lives.

After-tax cash flows (in millions of dollars):

Year CFL CFS

0 ($100) ($100)

1 $10 $70

2 $60 $50

3 $80 $20

the weighted average cost is approximately 12%

9. What is the NPV of Project L?

a. approximately $20 million

b. approximately $14 million

c. approximately $200 million

d. approximately $110 million

QUESTION 10

What is the NPV of Project S?

a. approximately $17 million

b. approximately $100 million

c. approximately $25 million

d. approximately $60 million

QUESTION 11

What is the IRR of Project L?

a. approximately 18%

b. approximately 25%

c. approximately 32%

d. approximately 13%

QUESTION 12

What is the IRR of Project S?

a. approximately 18%

b. approximately 24%

c. approximately 50%

d. approximately 22%

QUESTION 13

What is the MIRR for Project L?

a. approximately 17%

b. approximately 27%

c. approximately 30%

d. None of the choices

QUESTION 14

What is the MIRR for Project S?

a. approximately 18%

b. approximately 35%

c. approximately 2%

d. approximately 10%

QUESTION 15

What is the Payback period of Project L?

a. 2.9

b. 2.4

c. 1.7

d. 1.6

QUESTION 16

What is the Payback period of Project S?

a. 1.6

b. 2.4

c. 2.9

d. 1.9