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

0.13

B

73

30

30

30

30

0.13

The payback period for project B is closest to:

years

A.

2.4 YEARS

B.

1.9

years

C.

2.7

years

D.

2.2

years

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