Problem 8-3 Calculating Payback [LO 1]

Global Toys, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available.

Year	Cash Flow A		Cash Flow B
0	$	52,000	$	97,000
1		20,500		22,500
2		27,200		27,500
3		22,500		31,500
4		8,500		243,000

Requirement 1:

What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

	Payback period
Project A	years
Project B	years

Requirement 2:

Should it accept either of them?

(Click to select)Accept both projects A and BAccept project A and reject project BReject both projects A and BAccept project B and reject project A