Swan plc. is considering two investment projects whose cash flows are shown below:

Points in time (yearly interval) 0 1 2 3 4

Project A () -60,000 30,000 22,500 21,000 9,000

Project B () -60,000 7,500 22,500 27,500 30,000

The companys required rate of return is 15% and two projects are mututally exclusive.

(a) Use the sample payback method to advise the company which project should be taken (if any). Assuming the threshold figure is set to be 3 years.