The CEO wants to use the IRR criterion, while the CFO favors the NPV method....
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Accounting
The CEO wants to use the IRR criterion, while the CFO favors the NPV method. You were hired to advise Sunny Boat Rental Inc. on the best procedure. If the wrong decision criterion is used, how much potential value would the company lose?
| WACC: 6.00% |
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| Year | 0 | 1 | 2 | 3 | 4 |
| CFA | -$1,025 | $380 | $380 | $380 | $380 |
| CFB | -$2,150 | $765 | $765 | $765 | $765 |
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