1 Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows The required rate of return on projects of both of their risk class is 8 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and three years, respectively Time 0 1 2 3 Project A Cash Flow 20,000 10,000 30,000 1,000 Project B Cash Flow 30,000 10,000 20,000 50,000 Use the discounted payback decision rule to evaluate these projects which one(s) should be accepted or rejected A ACCEPT BOTH A AND B B ACCEPT NEITHER A NOR B C ACCEPT A, REJECT B D REJECT A, ACCEPT B

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Question: 1. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects

1. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 8 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and three years, respectively.

Time	0	1	2	3
Project A Cash Flow	?20,000	10,000	30,000	1,000
Project B Cash Flow	?30,000	10,000	20,000	50,000

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

A. ACCEPT BOTH A AND B

B. ACCEPT NEITHER A NOR B

C. ACCEPT A, REJECT B

D. REJECT A, ACCEPT B

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