Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available.

Year	Cash Flow (A)	Cash Flow (B)
0	-$62,000	-$107,000
1	$25,500	$27,500
2	33,200	$32,500
3	$27,500	$26,500
4	$13,500	$233,000

1) What is the payback period for each project?

Project A:

Project B:

Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.

2) Which, if either of the projects, should the company accept?

a) accept both projects A and B

b) accept project A and reject project B

c) accept project B and reject project A

d) reject both projects A and B