A.

B.

Colvern Corporation is considering the acquisition of a new computer-aided machine tool to replace an existing, outdated model. Relevant information includes the following. Annual after-tax cash flows for the project would amount to: $17.040. $22,800. $23,440. $8,400. LZ Company ranks projects on the basis of payback. LZ Company only accepts projects with a payback period of less than 3 years. Project A has an investment of $10,000 and generates incremental cash flows of $3,000 a year for 10 years. Project B has an investment of $20,000 and generates incremental cash flows of $8,000 per year for 8 years. Project C has an investment of $30,000 and generates cash flows of $9,000 per year for 6 years. Assuming LZ Company has $30,000 of capital available and the projects are mutually exclusive, which project(s) should LZ Company accept? Project B only Project Conly Project A first then Project B Project A only