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Could you answer the excercise following the steps of the already completed excercise, thank you. Consider the following two independent investment projects: Cash flows of

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Could you answer the excercise following the steps of the already completed excercise, thank you.
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Consider the following two independent investment projects: Cash flows of project A: Cash flows of project B : If management only accepts projects that pay back in 3 years or less, according to the discounted payback period rule, which projects will be selected? Use a discount rate of 10%. a. Project B would be accepted, but not Project A. b. Project A has a DPBP of 2 years and Project B has a DPBP of 2.5 years so Project B will be accepted instead of Project A. c. Project A would be accepted, but not Project B. d. Neither Project A nor Project B should be accepted. e. Both projects will be selected. Cash flows of project A : Cash flows of project B : a) Using a cutoff period of 2 years, find the best investment using the payback criterion and the discounted payback period rule. PBA=2 years; PBB=2+(150130)/40=2.5 years. Project A looks better since payback is within the cutoff period. Project A never pays back by the discounted payback period rule. DPBPRB=3+(150140.72)/25.42=3+9.28/25.42=3.37 years

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