Given the cash flow of two

projectsA

and

Bin

the following table,

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,

and using the payback period decision model, which project(s) do you accept and which project(s) do you reject if you have a

3-year

cutoff period for recapturing the initial cash outflow? For payback period calculations, assume that the cash flow is equally distributed over the year.

Cash Flow	A		B
Cost	$12,000		$95,000
Cash flow year 1	$6,000		$19,000
Cash flow year 2	$6,000		$9,500
Cash flow year 3	$6,000		$38,000
Cash flow year 4	$6,000		$28,500
Cash flow year 5	$6,000		$0
Cash flow year 6	$6,000		$0