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Moerdyk & Co. is considering Projects S and L, whose cash flows are shown below. These...

Moerdyk & Co. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher IRR, how much value will be forgone?

WACC: 6.75%

0 1 2 3 4

CFS -$1,025 $650 $450 $250 $50

CFL -$1,025 $100 $300 $500 $700

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jeff jeffy answered 1 year ago
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