UF Company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable. WACC 7.5% Year 0 1 2 3 4       CFS ($1,050) $700 $625           CFL ($1,050) $370 $370 $360 $360       Question: Calculate IRR of projects S and L, IRRS   & IRRL  (show in excel format with spreadsheet inputs)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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UF Company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable.

WACC 7.5%

Year 0 1 2 3 4      
CFS ($1,050) $700 $625          
CFL ($1,050) $370 $370 $360 $360      

Question: Calculate IRR of projects S and L, IRRS   & IRRL  (show in excel format with spreadsheet inputs)

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If the decision is made by choosing the project with the higher IRR, how much value will be forgone? 

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