Project S costs $18,000 and its expected cash flows would be $6,500 per year for 5 years. Mutually exclusive Project L costs $29,500 and its expected cash flows would be $9,200 per year for 5 years. If both projects have a WACC of 12%, which project would you recommend?

Select the correct answer.

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

b. Neither Project S nor L, since each project's NPV < 0.

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

d. Project L, since the NPVL > NPVS.

e. Project S, since the NPVS > NPVL.