Choosing between two projects with acceptable payback periodsShell CampingGear, Inc., is considering two mutually exclusive projects. Each requires an initial investment of $140 comma 000

140,000. JohnShell, president of thecompany, has set a maximum payback period of 4 years. Theafter-tax cash inflows associated with each project are shown in the followingtable: LOADING...

.

a.Determine the payback period of each project.

b.Because they are mutuallyexclusive, Shell must choose one. Which should the company investin?

a.The payback period of project A is

nothing

years.(Round to two decimalplaces.)

The payback period of project B is

nothing

years.(Round to two decimalplaces.)

b.Because they are mutuallyexclusive, Shell must choose one. Using the paybackperiod, which project should the company investin?(Select the best answerbelow.)

Project B would be preferred over project A because the larger cash flows are in the early years of the project.

Project A would be preferred over project B because the larger cash flows are in the later years of the project.