A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 Project 1 -$300 $55 $55 $55 $230 $230 Project 2 -$500 $200 $200 $120 $120 $120 Which project would you recommend?

Select the correct answer. a. Neither Project 1 nor 2, since each project's NPV < 0.

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

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

d. Project 2, since the NPV2 > NPV1.

e. Project 1, since the NPV1 > NPV2.