Question: A company is considering two projects. Project A Project B Initial investment $300,000 $300,000 Cash inflow Year 1 $60,000 $90,000 Cash inflow Year 2 $60,000
A company is considering two projects.
| Project A | Project B | |
| Initial investment | $300,000 | $300,000 |
| Cash inflow Year 1 | $60,000 | $90,000 |
| Cash inflow Year 2 | $60,000 | $80,000 |
| Cash inflow Year 3 | $60,000 | $80,000 |
| Cash inflow Year 4 | $60,000 | $50,000 |
| Cash inflow Year 5 | $60,000 | $70,000 |
What is the payback period for Project B?
a.2.5 years
b.3.5 years
c.2 years
d.3 years
e.4.5 years
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