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A firms maximum desired payback period for a project costing $11,000 is two years. Based on this criterion, which project should be chosen? Project A

A firms maximum desired payback period for a project costing $11,000 is two years. Based on this criterion, which project should be chosen?

Project A Project B

Initial Outlay ($11,000) ($11,000)

Cash flow year 1 9,000 7,000

2 6,000 4,000

3 3,000 3,000

4 1,000 2,000

A. Project A

B. Project B

C. Both projects meet the criterion

D. Neither project meets the criterion

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