16)

Project S requires an initial outlay at t = 0 of $17,000, and its expected cash flows would be $6,000 per year for 5 years. Mutually exclusive Project L requires an initial outlay at t = 0 of $40,500, and its expected cash flows would be $13,600 per year for 5 years. If both projects have a WACC of 13%, which project would you recommend? Select the correct answer. O a. Both Projects S and L. since both projects have NPV's > 0. O b. Both Projects S and L. since both projects have IRR's > 0 O c. Neither Project Snor L, since each project's NPV NPVL. O e. Project L. since the NPVL > NPVS