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Exam Code: E-ACTCLD-21

Exam Name: SAP Certified Specialist - SAP Activate for Cloud Solutions Project Manager

Certification Provider: SAP

Related Certification: SAP Certified Specialist - SAP Activate for Cloud Solutions Project Manager

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NEW QUESTION: 1
Your company is choosing between the following non-repeatable, equally risky, mutually exclusive projects with the cash flows shown below. Your cost of capital is 10 percent. How much value will your firm sacrifice if it selects the project with the higher IRR? Project S:
0123
-1,000500500500
Project L:
012345
-2,000668.76668.76668.76668.76668.76
A. $291.70
B. $243.43
C. $481.15
D. $535.13
E. $332.50
Answer: A
Explanation:
Explanation/Reference:
Explanation:
NPV(S) = $243.43; IRR(S) = 23.38%.
NPV(L) = $535.13; IRR(L) = 20.00%.
Value sacrificed: $535.13 - $243.43 = $291.70.


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