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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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