Noe Drilling Inc A) $7338
B) $79

question 10

Multiple Choice

Noe Drilling 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,i.e. ,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. $$\begin{array} { l c c c c c } \text { WACC: } & 9.00 \% & & & \\& { 0 } & 1 & 2 & 3 & 4 \\\hline \mathrm { CF } _ { \mathrm { S } } & - \$ 1,100 & \$ 550 & \$ 600 & \$ 100 & \$ 100 \\\mathrm { CF } _ { \mathrm { L } } & - \$ 2,750 & \$ 725 & \$ 725 & \$ 800 & \$ 1,400\end{array}$$

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Definitions:

Biological Damage

Physical harm or deterioration to biological organisms or systems.

Weakened Immune System

A reduced ability of the immune system to fight infections and diseases, which can be caused by a variety of factors including stress, disease, or malnutrition.

General Adaptation Syndrome

A model describing the body's short-term and long-term reactions to stress, characterized by three stages: alarm, resistance, and exhaustion.

Corticotropin-Releasing Hormone

A hormone secreted by the hypothalamus that stimulates the release of adrenocorticotropic hormone (ACTH) from the pituitary gland, playing a key role in the stress response.