Murray Inc A) $18868
B) $198

question 92

Multiple Choice

Murray Inc.is considering Projects S and L, whose cash flows are shown below.These projects are mutually exclusive, equally risky, and not repeatable.The CEO wants to use the IRR criterion, while the CFO favors the NPV method.You were hired to advise Murray on the best procedure.If the wrong decision criterion is used, how much potential value would Murray lose? $\begin{array}{cccccc}\text { r: } 6.00 \%\\\text { Year } & 0 & 1 & 2 & 3 & 4 \\\hline\mathrm{CF}_{\mathrm{S}} & -\$ 1,025 & \$ 380 & \$ 380 & \$ 380 & \$ 380 \\\mathrm{CF}_{\mathrm{L}} & -\$ 2,150 & \$ 765 & \$ 765 & \$ 765 & \$ 765\end{array}$

• A) $188.68
• B) $198.61
• C) $209.07
• D) $219.52
• E) $230.49

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Definitions:

Prefrontal Cortex

The front part of the frontal lobes of the brain, involved in complex behaviours including planning, decision making, and moderating social behaviour.

Amygdala

A part of the brain involved in processing emotions, particularly fear and pleasure.

Cerebellum

A region of the brain that plays a significant role in motor control, balance, and coordination.

Hippocampus

A major component of the brain's limbic system involved in memory formation and spatial navigation.