Imagine you are selecting between potential new projects and want to use payback period to determine which project to begin. Project A has project costs of $100,000, estimated project revenue of $200,000, and annual cash flows of $40,000. Project B has project costs of $250,000, estimated project revenue of $500,000 and annual cash flows of $100,000. Which project has a more favorable payback period for your company?

Group of answer choices

Project A has a more favorable payback period.

Project B has a more favorable payback period.

Project A and Project B have equally favorable payback periods.

Payback periods cannot be calculated with the information given.