Your company accepts projects with a two year or less payback period. What should you do based on the following information?

Cash Flow Period 0 1 2 3

project A -$78,000 $30,000 $48,000 $14,000

project B -$74,000 $12,000 $16,000 $75,000

Extend the payback period for project A since it has a higher initial cost, which would make.

a. Accept project A and reject project B.

b. Reject both project A and project B.

c. Accept project B and reject project A.

d. Accept both project A and project B.