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Capital budgeting criteria: mutually exclusive projects Project S costs $12,000 and its expected cash flows would be $5,500 per year for 5 years. Mutually exclusive Project L costs $26,500 and its expected cash flows would be $10,600 per year for 5 years. If both projects have a WACC of 15%, which project would you recommend? Select the correct answer. O 1. Project S, since the NPVs > NPVL. II. Neither Sor L, since each project's NPV 0. IV. Project L, since the NPVL > NPVs. V. Both Projects and L, since both projects have IRR's > 0