Project S requires an initial outlay at t = 0 of $17,000, and its expected cash flows would be $7,000 per year for 5 years. Mutually exclusive Project L requires an initial outlay at t = 0 of $31,000, and its expected cash flows would be $13,900 per year for 5 years. If both projects have a WACC of 13%, which project would you recommend?

Select the correct answer.

a. Both Projects S and L, since both projects have NPV's > 0. b. Neither Project S nor L, since each project's NPV < 0. c. Project S, since the NPVS> NPVL. d. Both Projects S and L, since both projects have IRR's > 0. e. Project L, since the NPVL> NPVS