A firm is evaluating two projects that are mutually exclusive with initial investments and cash flows as follows:

Project A Project B

Initial End-of-Year Initial End-of-Year

Investment Cash Flows Investment Cash Flows

$90,000 $40,000 $35,000 $20,000

40,000 20,000

80,000 20,000

If the firm whose projected cash flows are shown in the table has a required payback of two years, it should ___________.

	a.	reject Project A and accept Project B
	b.	accept Project A and reject Project B
	c.	reject both of the projects
	d.	accept Project A and Project B