Question: Consider the following two projects: Project Year 0 Cash Flow Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash

Consider the following two projects:

Project

Year 0

Cash Flow

Year 1

Cash Flow

Year 2

Cash Flow

Year 3

Cash Flow

Year 4

Cash Flow

Discount

Rate

A

100

40

50

60

N/A

0.11

B

73

20

20

20

20

0.11

The payback period for project B is closest to:

A.

3.3

years

B.

2.9

years

C.

4

years

D.

3.7

years

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