Kosovski Company Is Considering Projects S and L,whose Cash Flows $\text { WACC: } \quad 6.25 \%$

question 93

Multiple Choice

Kosovski 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. $\text { WACC: } \quad 6.25 \%$
$\begin{array}{llllll}&0&1&2&3&4\\\hline\mathrm{CF}_{\mathrm{S}} & -\$ 1,050 & \$ 675 & \$ 650 & & \\\mathrm{CF}_{\mathrm{L}} & -\$ 1,050 & \$ 360 & \$ 360 & \$ 360 & \$ 360\end{array}$

• A) $29.26
• B) $35.69
• C) $34.82
• D) $26.33
• E) $31.31

Formulate null and alternative hypotheses for comparing two population locations.

Calculate and interpret test statistics for the Wilcoxon rank sum test.

Determine and interpret critical values for statistical tests.

Make informed decisions based on statistical tests' outcomes.

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