Silverman Co A) $3212
B) $35

question 44

Multiple Choice

Silverman 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 MIRR rather than the one with the higher NPV, how much value will be forgone? Note that under some conditions choosing projects on the basis of the MIRR will cause $0.00 value to be lost. $\begin{array}{cccccc}\text { r: } 8.75 \%\\\text { Year } & 0 & 1 & 2 & 3 & 4 \\\hline \mathrm{CF}_{\mathrm{S}} & -\$ 1,100 & \$ 375 & \$ 375 & \$ 375 & \$ 375 \\\mathrm{CF}_{\mathrm{L}} & -\$ 2,200 & \$ 725 & \$ 725 & \$ 725 & \$ 725\end{array}$

• A) $32.12
• B) $35.33
• C) $38.87
• D) $40.15
• E) $42.16

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Definitions:

Endorphin

Natural peptides produced by the brain that act as neurotransmitters to reduce pain perception and lead to feelings of euphoria.

Serotonin

A neurotransmitter that contributes to feelings of well-being and happiness, also involved in the regulation of mood, sleep, and appetite.

Substance P

A neuropeptide involved in the transmission of pain and other sensory signals to the brain, also implicated in inflammatory processes.

Endorphins

Neurotransmitters produced by the nervous system to cope with pain or stress, often described as "natural painkillers."