Your company is considering Projects X and Y, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If you decide to invest in the project with the higher IRR, how much value will be forgone, if any? Note that under certain conditions choosing projects on the basis of the IRR will not cause any value to be lost because the one with the higher IRR will also have the higher NPV. 1 WACC: Time Periods: Cash Flow Cash Flowy 12.00% 0 -$1,025 -$1,025 $650 $100 2 $450 $300 3 $250 $500 $50 $700 O a) -$1.44 m b) -$1.30 C) -$1.17 d) $0.00 Question 8 (2 points) Hannah is evaluating whether to purchase a small business. Hannah requires an IRR of 9%. The investment will cost $50,000 initially, and will generate after-tax cash flows of $7,000 per year for 7 years. Due to the type of business, Hannah is likely to receive an additional positive cash flow amount in the 7th year (over and above the $7,000). After 7 years, the business ends and will be worthless. What must the minimum "additional" after-tax cash flow be for Hannah to even consider purchasing the business? a) $1.828 b) $27.000 C) $1,000 d) $14.770