Question 1:

Project L requires an initial outlay at t = 0 of $46,000, its expected cash inflows are $8,000 per year for 6 years, and its WACC is 14%. What is the project's payback? Round your answer to two decimal places.

______ years

Question 2:

A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 5 Project 1 -$200 $60 $60 Project 2 -$600 $200 $200 Which project would you recommend? $60 $130 $195 $130 $195 $130 Select the correct answer. a. Project 1, since the NPV1 > NPV2. b. Project 2, since the NPV2> NPV1. 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