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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
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 11 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.
Time:0123Project A Cash Flow-28,000 18,000 38,000 9,000
Project B Cash Flow -38,000 18,000 12,000 58,000
Use the payback decision rule to evaluate these projects; which one(s) should be accepted or rejected?
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