Crane Crafts Corp. management is evaluating two independent capital projects that will each cost the company $290,000. The two projects will provide the following cash flows:

YEAR PROJECT A PROJECT B

1 $78,750 $34,500

2 $95,450 $98,300

3 $36,235 $178,900

4 $147,655 $76,110

What is the payback period of both projects? (Round answers to 2 decimal places, e.g. 15.25.)

A:

B:

Which project will be chosen if the companys payback criterion is three years?

What if the company accepts all projects as long as the payback period is less than five years?