5. Project L requires an initial outlay at t = 0 of $70,000, its expected cash inflows are $16,000 per year for 9 years, and its WACC is 13%. What is the project's discounted payback? Do not round intermediate calculations. Round your answer to two decimal places. Answer should be expressed in years.

9. Project S requires an initial outlay at t = 0 of $11,000, 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 $38,500, and its expected cash flows would be $9,500 per year for 5 years. If both projects have a WACC of 15%, which project would you recommend?

Select the correct answer.

a. Both Projects S and L, because both projects have NPV's > 0.

b. Project S, because the NPVS > NPVL.

c. Project L, because the NPVL > NPVS.

d. Neither Project S nor L, because each project's NPV < 0.

e. Both Projects S and L, because both projects have IRR's > 0.

10. A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:

0

1

2

3

4

Project S	-$1,000	$889.21	$250	$10	$10
Project L	-$1,000	$0	$250	$420	$757.85

The company's WACC is 10.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.