chosing mandatory project on basis of least cost

Choosing mandatory projects on the basis of least cost Kim Inc. must install a new air conditioning unit in its main plant. Kim must install one or the other of the units; otherwise, the highly profitable plant would have to shut down. Two units are available, HCC and LCC (for high and low capital costs, respectively). HCC has a high capital cost but relatively low operating costs, while LCC has a low capital cost but higher operating costs because it uses more electricity. The costs of the units are shown here. Kim's WACC is 6.5%. HCC $590,000 $55,000 $55,000 $55,000 $55,000 $55,000 $100,000 $175,000 $175,000 $175,000 $175,000 $175,000 LCC a. Which unit would you recommend? I. Since all of the cash flows are negative, the NPV's will be negative and we do not accept any project that has a negative NPV. II. Since all of the cash flows are negative, the IRR's will be negative and we do not accept any project that has a negative IRR. III. Since we are examining costs, the unit chosen would be the one that had the lower PV of costs. Since LCC's PV of costs is lower than HCC's, LCC would be chosen. IV. Since we are examining costs, the unit chosen would be the one that had the lower PV of costs. Since HCC's PV of costs is lower than LCC's, HCC would be chosen. V. Since a of the cash flows are neaative, the NPV's cannot be calculated and an alternative method must be emploved