Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 9 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.

Time:

0

1

2

3

Project A Cash Flow

-31,000

21,000

41,000

12,000

Project B Cash Flow

-41,000

21,000

9,000

61,000

Use the payback decision rule to evaluate these projects; which one(s) should it be accepted or rejected?