A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 Project 1 -$500 $75 $75 $75 $225 $225 Project 2 -$600 $300 $300 $120 $120 $120 Which project would you recommend? Select the correct answer.

a. Project 2, since the NPV2 > NPV1.

b. Both Projects 1 and 2, since both projects have NPV's > 0.

c. Neither Project 1 nor 2, since each project's NPV < 0.

d. Project 1, since the NPV1 > NPV2.

e. Both Projects 1 and 2, since both projects have IRR's > 0.