Project s and l both have an initial cost of 10000 followed


Project S and L both have an initial cost of $10,000 followed by a series of positive cash inflows. Project S's undiscounted net cash flows total $20,000, while L's total undiscounted flows are $30,000. At a WACC of 10% the two projects have identical NPVs. WHICH PROJECTS NPV IS MORE SENSITIVE TO CHANGES IN THE WACC?

A. Project S

B. Project L

C. Both

D. Neither

E. Solution cannot be determined

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Financial Management: Project s and l both have an initial cost of 10000 followed
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