If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or

Project B) will WiseGuy Inc. prefer?

	Project A	Project B
Time 0	-10,000	-10,000
Time 1	5,000	4,000
Time 2	4,000	3,000
Time 3	3,000	10,000

a) Project A

b) Project B

c) Project A and Project B have the same ranking.

d) 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?

a) Project A

b) Project B

c) Project A and Project B have the same ranking.

d) Cannot calculate an IRR without a discount rate