Project L costs $70,000, its expected cash inflows are $12,000 per year for 6 years, and its WACC is 10%. What is the project's payback? Round your answer to two decimal places.

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

0

1

2

3

4

5

Project 1	-$200	$50	$50	$50	$195	$195
Project 2	-$700	$250	$250	$145	$145	$145

Which project would you recommend?

Select the correct answer.

a. Project 2, since the NPV2 > NPV1.

b. Project 1, since the NPV1 > NPV2.

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

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

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