Kosovski company is considering projects s and l, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable. If the decision is made by choosing the project with the higher irr, how much value will be forgone? note that under some conditions choosing projects on the basis of the irr will cause $0. 00 value to be lost.

Question

22-04-2022
Business

contestada

Kosovski company is considering projects s and l, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable. If the decision is made by choosing the project with the higher irr, how much value will be forgone? note that under some conditions choosing projects on the basis of the irr will cause $0. 00 value to be lost.

Respuesta :

Otras preguntas

Which of the following describes the correct process for solving the equation 3x+6=21 and arrives at the correct solution? A. Divide both sides by 6 and then a

What is $699.99 in percent?

How can a car be safer

What shape could be rotated about the y-axis as shown below to form a square pyramid? A) Sphere B) Cone C) Cylinder D) None of the above

z is 6 more than twice y

If someone had $5,000 and wanted to place it in a financial institution, what type of institution and account would you suggest to the person?

Axis Powers used what pact to hide their aggressive intentions? a. Nazi-Soviet Pact c. Anti-Nazi Pact b. Anti-Comintern Pact d. Nazi-Comintern Pact

On the maxillary left side, there's only one posterior tooth, which is large and has a fifth cusp and three roots. This tooth is a maxillary A. second premolar

Use the Distributive Property to find the price of 9 CDs that cost $13.99 each. A. $125.91 B. $126.00 C. $126.90 D. $117.00

Iliana’s gross pay is $2,130 per month. Her deductions total $270. She budgets for $1,000 in fixed expenses and $400 in variable expenses. How much money will I

Parrain Parrain · Answer 1 · 2022-04-26T15:35:35+02:00

Based on the cashflows of these projects and the IRR, the project with the higher IRR would be CFS and the value that would be foregone is $12.72.

What are the project IRRs?

Using a spreadsheet, you can find the IRR of both projects to be:

CFS = 17.13%

CFL = 13.95%

What are the project NPVs?

CFS NPV is:

= 675 / 1.0775 + 650 / 1.0775² - 1,050

= $136.31

CFL NPV is:

= 360 / 1.0775 + 360 / 1.0775² + 360 / 1.0775³ + 360 / 1.0775⁴ - 1,050

= $149.03

The value foregone by picking CFS instead of CFL is:

= 149.03 - 136.31

= $12.72

Find out more on NPV at https://brainly.com/question/13228231.