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Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Year Cash Flow (A) Cash Flow (B) 0 $ 70,000 $

Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects.

Year Cash Flow (A) Cash Flow (B)
0 $ 70,000 $ 80,000
1 28,000 20,000
2 38,000 23,000
3 26,000 36,000
4 13,000 240,000

What is the payback period for both projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Which project should the company accept?

multiple choice
  • Project B

  • Project A

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