Projects npv is more sensitive to changes in wacc

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Reference no: EM13943729

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

Reference no: EM13943729

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