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

Which project would you recommend?

Select the correct answer.

A) Neither Project 1 nor 2, since each project's NPV

B) Both Projects 1 and 2, since both Projects have IRR's > 0

C) Project 2, since the NPV₂ > NPV₁

D) Project 1, since the NPV₁ > NPV₂

E) Both Projects 1 and 2, since both Projects have NPV's > 0

0 1 2 3 4 5 -$500 Project 1 Project 2 $55 $350 $55 $350 $55 $100 $210 $100 $210 $100 -$700