Lim Manufacturing is considering two investments, Project A and Project B, and both costs equally at RM10,000. The cash flow projected is as follows:

YEAR PROJECT A (RM) PROJECT B (RM)

1 6,000 5,000

2 4,000 3,000

3 3,000 8,000

Select one:

a. Project B which has a payback period of 2.25 years.

b. Project B which has a payback period of 2.0 years.

c. Project A which has a payback period of 2.0 years.

d. Project A which has a payback period of 2.25 years.