Murray Inc A) $18868
B) $198

question 20

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? $\begin{array}{lccccc}\text { WACC: } & 6.00 \% & & & \\\text { Year } & 0 & 1 & 2 & 3 & 4 \\\mathrm{CF}_{\mathrm{S}} & -\$ 1,025 & \$ 380 & \$ 380 & \$ 380 & \$ 380 \\\mathrm{CF}_{\mathrm{L}} & -\$ 2,150 & \$ 765 & \$ 765 & \$ 765 & \$ 765\end{array}$

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

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Definitions:

Federal Programs

Government initiatives designed to provide services, support, or benefits at the national level.

Land-Line Call

A telephone call made through a direct line connection that uses physical wires or fiber optic cabling for transmissions.

Non-Face-To-Face Communication

Communication methods that do not involve in-person interaction, such as texting, emailing, or using video calls.

Mental Health Parity

The equal treatment of mental health conditions and substance use disorders in insurance plans compared to physical health ailments.