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TABLE 3 Project A Project B Time 0 -11,000 -10,000 Time 1 3,000 4,000 Time 2 8,000 3,000 Time 3 3,000 10,000 Consider the cash
TABLE 3 | ||
| Project A | Project B |
Time 0 | -11,000 | -10,000 |
Time 1 | 3,000 | 4,000 |
Time 2 | 8,000 | 3,000 |
Time 3 | 3,000 | 10,000 |
"Consider the cash flow of the two projects depicted in Table 3. If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will rank highest?"
A) Project A | ||
B) Project B | ||
C) Project A and Project B have the same ranking. | ||
D) Cannot calculate a payback period without a discount rate. |
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