ValleyProducts, Inc. isconsideringtwoindependentinvestmentshavingthefollowingcashflow

streams:

Year Project A Project B

0 -$50,000 -$40,000

1 +20,000 +20,000

2 +20,000 +10,000

3 +10,000 +5,000

4 +5,000 +40,000

5 +5,000 +40,000

Valley uses a combination of the net presentvalueapproachandthepaybackapproachtoevaluateinvestmentalternatives. Itrequiresthatallprojectshave a positive net presentvaluewhencashflowsarediscounted at 10 percentandthatallprojectshave a paybackperiodnolongerthan 3 years. Whichprojectorprojectsshouldthefirmaccept? Why?