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	36,000	26,000	46,000	17,000
Project B Cash Flow	46,000	26,000	36,000	66,000

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

rev: 11_22_2021_QC_CS-286209

Multiple Choice

• Reject A, accept B

• Accept neither A nor B

• Accept A, reject B

• Accept both A and B