12-2: Net Present Value (NPV) Capital budgeting criteria: mutually exclusive projects Project S costs $12,000 and its expected cash flows would be $5,000 per year for 5 years. Mutually exclusive Project L costs $40,500 and its expected cash flows would $11,000 per year for 5 years. If both projects have a WACC of 15%, which project would you recommend? Select the correct answer I. Project L, since the NPV >NPVs II. Neither S or L, since each project's NPV 0. IV. Both Projects S and L, since both projects have IRR's>0 V. Project S, since the NPVs>NPV