THE FOLLOWING DATA APPLY TO THE NEXT SIX PROBLEMS The director of capital budgeting for Giant Inc. has identified two mutually exclusive projects, L and S, with the following expected net cash flows:

	Expected Net Cash Flows
Year	Project L	Project S
0	($100)	($100)
1	$10	$70
2	$60	$50
3	$80	$20

1. Plot NPV profiles for the two projects and estimate the cost of capital when two NPV profiles cross?

   		6.9%
   		7.8%
   		8.7%
   		9.6%
   		9.9%