XYZ Plumbing has a weighted-average cost of capital of 9.13 percent. The firm is evaluating a two-year project called the big air project, which is believed by all to have a cost of capital of 9.13 percent. The project would involve an initial investment of $73,000, an expected cash flow of -$27,000 in year 1, and an expected cash flow of $138,000 in year 2. DKs Barrel Factory has a lower weighted-average cost of capital than XYZ Plumbing. Which of the following assertions is true?

a.

Since the expected cash flows for the big air project are not conventional, the NPV can not be computed

b.

It is not clear whether the NPV of the project computed by XYZ Plumbing would be less than, equal to, or greater than the NPV of the project computed by DKs Barrel Factory

c.

The NPV of the big air project computed by XYZ Plumbing would be less than the NPV of the big air project computed by DKs Barrel Factory

d.

The NPV of the big air project computed by XYZ Plumbing would be greater than the NPV of the big air project computed by DKs Barrel Factory

e.

The NPV of the big air project computed by XYZ Plumbing would be equal to the NPV of the big air project computed by DKs Barrel Factory