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Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 8 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and three years, respectively.

Time:0123
Project A Cash Flow-29,00019,00039,00010,000
Project B Cash Flow-39,00019,00011,00059,000

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

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