Consider the cash flow of the two projects depicted in table 3. If WiseGuy inc. uses payback rule to choose projects, which of the projects (project A or project B) will rank highest? Table 3

Project A. Project B

Time 0 -11000 -4000

Time 1. 3000. 4000

Time 2 8000. 3000

Time 3 12000. 10000

Project A,

Project B.

Project A and Project B have the same ranking.

Cannot calculate a payback period without a discount rate

If WiseGuy inc. uses IRR rule to choose projects, which of the projects (Project A or Project B) will rank highest? Project A

Project B

Project A and Project B have the same ranking

Cannot calculate a payback period without a discount rate