Project $S$ requires an initial outlay at $t=0$ of $$12,000,$ and its expected cash flows would be $$5,000$ per year for $5$ years.

Mutually exclusive Project $L$ requires an initial outlay at $t=0$ of $$27,500,$ and its expected cash flows would be $$14,450$

per year for $5$ years. If both projects have a WACC of $12\%,$ which project would you recommend?

Select the correct answer.

a$.$ Neither Project $S$ nor L$,$ since each project's NPV

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

c$.$ Project $S_r$ since the NPVS $>$ NPVL$-$

d$.$ Both Projects $S$ and $L,$ since both projects have NPV$\text{'}$s $>0.$

e$.$ Project $L_{,}$ since the NPVL $>$ NPVS$.$