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A firm with a WACC of 1 0 % is considering the following mutually exclusive projects: 0 1 2 3 4 5 Project 1 -

A firm with a WACC of 10% is considering the following mutually exclusive projects:
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Project 1-$300 $40 $40 $40 $175 $175
Project 2-$650 $300 $300 $105 $105 $105
Which project would you recommend?
Select the correct answer.
a. Project 1, since the NPV1> NPV2.
b. Both Projects 1 and 2, since both projects have IRR's >0.
c. Neither Project 1 nor 2, since each project's NPV <0.
d. Project 2, since the NPV2> NPV1.
e. Both Projects 1 and 2, since both projects have NPV's >0.

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