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

180 comma 000

180,000. 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:

LOADING...

.

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.)

The payback period of project B is

nothing

years.(Round to two decimal places.)

b.Because they are mutually exclusive, Shell must choose one. Using the payback period, which project should the company invest in?(Select the best answer below.)

Project

Upper B

B would be preferred over project

Upper A

A because the larger cash flows are in the early years of the project.

Project

Upper A

A would be preferred over project

Upper B

B because the larger cash flows are in the later years of the project.

Click to select your answer(s).

Data Table

(Click on the icon here in order to copy the contents of the data table below into a spreadsheet.)

Cash inflows (

CF Subscript t

CFt)

Year Project A Project B

1 $

30 comma 000

30,000 $

60 comma 000

60,000

2 $

40 comma 000

40,000 $

50 comma 000

50,000

3 $

50 comma 000

50,000 $

40 comma 000

40,000

4 $

60 comma 000

60,000 $

30 comma 000

30,000

5 $

30 comma 000

30,000 $

30 comma 000

30,000

Delmine the back of each rect The Round O Powdered over A O Project Awade predovert r chitects of the project r echts ewer years of the Data Table the con c ernede ti Choosing between two projects with acceptable payback periods Shell Camping Gear, Inc., is considering two mutually exclusive projects. Each requires an initial investment of $180,000. John Shell, pre 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: 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 Aisyears. (Round to two decimal places.) The payback period of project Bis years. (Round to two decimal places) b. Because they are mutually exclusive, Shell must choose one. Using the payback period, which project should the company invest in? (Select the best answer below.) O O 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 because the larger cash flows are in the later years of the project. Data Table (Click on the icon here into a spreadsheet.) in order to copy the contents of the data table below Year Cash inflows (CF) Project A Project B $30,000 $60,000 $40.000 $50,000 $80.000 $40,000 $60,000 $30,000 $30,000 $30,000