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Use the information for the question below. Project A Project B Time 0 -$10,000 -$10,000 Time 1 $5,000 $4,000 Time 2 $4,000 $3,000 Time 3
Use the information for the question below.
Project A | Project B | |
Time 0 | -$10,000 | -$10,000 |
Time 1 | $5,000 | $4,000 |
Time 2 | $4,000 | $3,000 |
Time 3 | $3,000 | $10,000 |
If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will WiseGuy Inc. prefer?
A. | Project A | |
B. | Project A and Project B have the same ranking. | |
C. | Project B | |
D. | Cannot calculate a payback period without a discount rate. |
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