1) Project L costs $59,206.43, its expected cash inflows are $12,000 per year for 10 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.

2) Project L costs $45,000, its expected cash inflows are $8,000 per year for 6 years, and its WACC is 13%. What is the project's payback? Round your answer to two decimal places.

3) A firm with a WACC of 10% is considering the following mutually exclusive projects:

0

1

2

3

4

5

Project 1	-$200	$60	$60	$60	$175	$175
Project 2	-$450	$300	$300	$40	$40	$40

Which project would you recommend? Select the correct answer:

I. Both Projects 1 and 2, since both projects have NPV's > 0.

II. Neither Project 1 nor 2, since each project's NPV < 0.

III. Both Projects 1 and 2, since both projects have IRR's > 0.

IV. Project 1, since the NPV1 > NPV2.

V. Project 2, since the NPV2 > NPV1.