You are considering the following two mutually exclusive projects.

Project A Project B

Year 0 -$15,000 -$30,000

Year 1 $ 5,000 $12,000

Year 2 $ 6 ,000 $11,000

Year 3 $ 7,000 $10,000

Year 4 $ 8,000 $ 9,000

The company's cost of capital is 3 percent, and it can get an unlimited amount of capital at that cost. The cutoff period is 3 years. Which project should the company choose based on payback period and discounted payback period?

Question 21 options:

	Based on payback period, choose project B; based on discounted payback, also choose B.
	Based on payback period, choose project B; based on discounted payback, choose A.
	Based on payback period, choose project A; based on discounted payback, also choose A.
	Based on payback period, choose project A; based on discounted payback, choose B.