how can a collision cause a loss of energy? Even if friction and energy loss is ignored?

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So basically I have a homework question that says:

Block 1 (m1, Vo) hits block 2 (m2, Vf) at rest. Block 1 rebounds at Vf1, and block 2 moves forward at a speed not given.

So m1, Vo, m2, and Vf1 are given, but Vf2 must be calculated. My question is how is it that in the end energy is lost?

Final equation: delta KE= (m1•Vf1^2/2+m2•Vf2^2/2)-m1•Vo^2/2

And Vf2=(m1•Vo-m1•Vf)/m2

So if all numbers are calculated why is there energy loss?

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