The financial manager is evaluating two new projects. The firm has a cost of capital of 8%.

The two projects are expected to have the following cash flows:

YearProject A (R)Project B (R)

1-50 000-80 000

220 00040 000

330 00030 000

410 00030 000

• Calculate the payback period for both projects and choose the correct option indicating the payback periods and which project should be selected based on the payback period.A.A: 3 years, B: 3 years, accept both projects
• B.A: 3 years, B: 3 years, accept neither of the projects
• C.A: 2 years, B: 2,3 years, accept project B
• D.A: 2 years, B: 2,3 years, accept project A