1. A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 5 N $65 $235 $130 $235 $130 Project 1 -$450 $65 $65 Project 2 -$700 $200 $200 $130 Which project would you recommend? Select the correct answer. a. Project 1, since the NPV > NPV 2. b. Project 2, since the NPV2 > NPV. c. Both Projects 1 and 2, since both projects have NPV's > 0. 4.d. Neither Project 1 nor 2, since each project's NPV 0. 2. Project S requires an initial outlay at t = 0 of $19,000, and its expected cash flows would be $4,000 per year for 5 years. Mutually exclusive Project L requires an initial outlay at t = 0 of $41,500, and its expected cash flows would be $14,450 per year for 5 years. If both projects have a WACC of 14%, which project would you recommend? Select the correct answer. a. Both Projects S and L, because both projects have NPV's > 0. b. Both Projects S and L, because both projects have IRR's > 0. c. Neither Project Snor L, because each project's NPV NPV. e. Project S, because the NPVs > NPV. I 3 3. A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 2 3 3 Projects -$1,000 $883.66 $250 $10 $5 Project -$1,000 $5 $260 $400 $759.92 The company's WACC is 8.5%. 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. %