Question: Atlantis Inc. is considering two mutually exclusive projects with the following cash flows: Year 0 1 2 3 4 Project A ($120,000) $60,000 $40,000 $60,000

Atlantis Inc. is considering two mutually exclusive projects with the following cash flows:

Year

0

1

2

3

4

Project A

($120,000)

$60,000

$40,000

$60,000

$80,000

Project B

($100,000)

$60,000

$50,000

$0

$0

If Atlantis accepts projects that pay back in two years or less, which should be undertaken?

a.

Project A

b.

Project B

c.

Both projects

d.

Neither project

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