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

012345 Project 1-$250$45$45$45$165$165Project 2-$650$300$300$135$135$135

Which project would you recommend?

Select the correct answer.

a. Both Projects 1 and 2, since both projects have IRR's > 0. b. Neither Project 1 nor 2, since each project's NPV < 0. c. Project 1, since the NPV₁ > NPV₂. d. Project 2, since the NPV₂ > NPV₁. e. Both Projects 1 and 2, since both projects have NPV's > 0