A company is analyzing two mutually exclusive projects, $S$ and $L,$ whose cash flows

are shown below:

The company's cost of capital is $12$ percent, and it can get an unlimited amount of

capital at that cost. Which project should the company choose based on NPV and

IRR? What should be the final choice?

Based on NPV$,$ choose project S; based on IRR, choose project L$.$ The company

should choose project $L.$

Based on NPV$,$ choose project L; based on IRR, choose project S$.$ The company

should choose project $S.$

Based on NPV$,$ choose project L; based on IRR, choose project S$.$ The company

should choose project L$.$

Based on NPV$,$ choose project S; based on IRR, choose project S$.$ The company

should choose project $S.$