Langton Inc A) $18590
B) $197

question 7

Multiple Choice

Langton 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 believes the IRR is the best selection criterion, while the CFO advocates the MIRR.If the decision is made by choosing the project with the higher IRR rather than the one with the higher MIRR, how much, if any, value will be forgone.In other words, what's the NPV of the chosen project versus the maximum possible NPV? Note that (1) "true value" is measured by NPV, and (2) under some conditions the choice of IRR vs.MIRR will have no effect on the value lost. $$\begin{array} { c c c c c c } & \mathrm { r } = 7.00 \% & & & \\\text { Year } & 0 & 1 & 2 & 3 & 4 \\\hline \mathrm { CF } _ { \mathrm { S } }& - \$ 1,100 & \$ 550 & \$ 600 & \$ 100 & \$ 100 \\\mathrm { CF } _ { \mathrm { L } } & - \$ 2,750 & \$ 725 & \$ 725 & \$ 800 & \$ 1,400\end{array}$$

• A) $185.90
• B) $197.01
• C) $208.11
• D) $219.22
• E) $230.32

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Definitions:

Clay Sculpture

Art forms created by shaping and molding clay into three-dimensional figures or objects, a technique used since ancient times.

Ceramics

The art or process of making objects from clay and other raw materials by the process of firing at high temperatures, resulting in a hardened, durable form.

Shona-Speaking People

An ethnic group from Southern Africa, primarily found in Zimbabwe, known for their sculptures and their rich traditions in music, art, and dance.

Regional Ancestors

Cultural or historical figures venerated within a specific geographical area for their contributions to the region's identity or heritage.