Problem 9-3 Calculating Payback [LO2]

Siva, Inc., imposes a payback cutoff of three years for its international investment projects.

Year	Cash Flow (A)				Cash Flow (B)
0	$	68,000			$	78,000
1		27,000				19,000
2		36,000				22,000
3		25,000				34,000
4		12,000				238,000

What is the payback period for both projects? (Round your answers to 2 decimal places, e.g., 32.16.)

	Payback period
Project A	years
Project B	years

Which project should the company accept?

	Project B
	Project A