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Consider the following table. The payback period cutoff is two years. Both projects cost R2.5-million. Year Project X Project Y 1 R1-million R1.75-million 2 R1-million

Consider the following table. The payback period cutoff is two years. Both projects cost R2.5-million.

Year Project X Project Y

1 R1-million R1.75-million

2 R1-million R1.75-million

3 R1-million 0

4 R1-million 0

Which would you pick using the payback rule? Provide three reasons justifying your answer.

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