Which project will you choose? Use the following information to answer the next THREE questions. A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown below:

	Year 0	Year 1	Year 2	Year 3	Year 4
Cashflow for S	-100	40	50	30	30
Cashflow for L	-150	10	10	50	200

Assume the company can get an unlimited amount of capital at that cost.

WACC	NPV (S)	NPV (L)
5%
10%
15%
17%
20%

Which of the following statements is correct? (Hint: complete the NPV profile)

Select one: PLEASE SHOW WORK AND EXPLAIN

a. If the WACC is smaller than the crossover rate, you will choose project L using the NPV method.

b. The crossover rate should be larger than 20%.

c. The crossover rate should be between 20% and 25%.

d. If the WACC larger than the crossover rate, a conflict arises between the NPV and the IRR methods.

e. The crossover rate should be smaller than 10%.