Project S costs $11,000 and its expected cash flows would be $4,500 per year for 5 years. Mutually exclusive Project L costs $27,000 and its expected cash flows would be $7,500 per year for 5 years. If both projects have a WACC of 13%, which project would you recommend?

Select the correct answer.

I. Neither S or L, since each project's NPV < 0.

II. Project L, since the NPVL > NPVS.

III. Both Projects S and L, since both projects have NPV's > 0.

IV. Both Projects S and L, since both projects have IRR's > 0.

V. Project S, since the NPVS > NPVL.