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	-21,000	11,000	31,000	2,000
Project B Cash Flow	-31,000	11,000	21,000	51,000

Use the PI decision rule to evaluate these projects; accept the project with the higher PI value.

• accept both A and B

• accept A, reject B

• accept neither A nor B

• reject A, accept B