Project S requires an initial outlay at t = 0 of $11,000, and its expected cash flows would be $4,500 per year for 5 years. Mutually exclusive Project L requires an initial outlay at t = 0 of $44,500, and its expected cash flows would be $9,400 per year for 5 years. If both projects have a WACC of 15%, which project would you recommend?

Problem 11.11 (Capital Budgeting Criteria: Mutually Exclusive Projects) Question 16 of 20 Check My Work (2 remaining) eBook Project S requires an initial outlay at t = 0 of $11,000, and its expected cash flows would be $4,500 per year for 5 years. Mutually exclusive Project L requires an initial outlay at t = 0 of $44,500, and its expected cash flows would be $9,400 per year for 5 years. If both projects have a WACC of 15%, which project would you recommend? Select the correct answer. a. Neither Project Snor L, since each project's NPV 0. X c. Both Projects S and L, since both projects have IRR's > 0. d. Project S, since the NPVs > NPVL- e. Project L, since the NPVL > NPVs. Hide Feedback Incorrect Check My Work (2 remaining) 0 Icon Key Problem 11.11 (Capital Budgeting Criteria: Mutually Exclusive Projects) Question 16 of 20