Use the payback decision rule to evaluate

Reference no: EM13281308

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.

Time:	0	1	2	3
Project A Cash Flow	-29,000	19,000	39,000	10,000
Project B Cash Flow	-39,000	19,000	11,000	59,000

Use the payback decision rule to evaluate these projects; which one(s) should it be accepted or rejected?

Reference no: EM13281308

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