Question: 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.

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 $42,000, and its expected cash flows would be $7,650 per year for 5 years. If both projects have a WACC of 12%, which project would you recommend? Select the correct answer. a. Project S, because the NPVS > NPVL. b.

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