Question: DEF, Inc. is considering the following two mutually exclusive projects with similar risks Year Project A Project B 0 $60,000 $60,000 1 20,500 18,200 2

DEF, Inc. is considering the following two mutually exclusive projects with similar risks

Year

Project A

Project B

0

$60,000

$60,000

1

20,500

18,200

2

15,600

24,400

3

24,400

15,600

4

18,200

20,500

(c) Calculate the payback periods. The target payback period is 2 years. Which project will you choose if you apply the payback period rule?

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