Carolina Company Is Considering Projects S and L, Whose Cash

question 41

Multiple Choice

Carolina 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. $\begin{array}{cccccc}\text { r: } 7.75 \%\\\text { Year } & 0 & 1 & 2 & 3 & 4 \\\hline\mathrm{CF}_{\mathrm{S}} & -\$ 1,050 & \$ 675 & \$ 650 & & \\\mathrm{CF}_{\mathrm{L}} & -\$ 1,050 & \$ 360 & \$ 360 & \$ 360 & \$ 360\end{array}$

• A) $11.45
• B) $12.72
• C) $14.63
• D) $16.82
• E) $19.35

---

Definitions:

Employee Skills

Refers to the abilities and competencies that individuals possess, which enable them to perform specific tasks and roles effectively within a workplace.

Rewards and Incentives

Tools or benefits used to motivate individuals towards achieving certain goals or desired behaviors within an organizational context.

Work Teams

Groups of individuals who collaborate to achieve a shared goal or task, typically within a professional setting.

Prolonged Conflicts

Disputes or disagreements that continue over a long period, often causing long-term negative impacts on relationships or organizational effectiveness.