ABC corp. has two projects with the following cash flows:

Year 0 Year 1 Year 2 Year 3

Project A: ($10,000) $1,000 $6,000 $8,000 Project B: ($10,000) $7,000 $5,000 $2,000

The cost of capital for both projects is 7%. If ABC corp. requires a 2-year cut-off payback period for any project, what decision will the company make using the payback period rule?

a	Accept B and reject A

b No decision can be made with the above information.

c Accept both projects

d Reject both projects

e Accept A and reject B