Choosing between two projects with acceptable payback periods Shell Camping Gear, Inc., is considering two mutually exclusive projects. Each requires an initial investment of

$140 comma 000140,000.

John Shell, president of the company, has set a maximum payback period of 4 years. The after-tax cash inflows associated with each project are shown in the following table:

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.

a. Determine the payback period of each project.

b. Because they are mutually exclusive, Shell must choose one. Which should the company invest in?

a. The payback period of project A is

nothing

years. (Round to two decimal places.)

1 $20,000 $50,000

2 $30,000 $40,000

3 $40,000 $30,000

4 $50,000 $20,000

5 $40,000 $40,000