Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is $9$ percent, and that the maximum allowable payback and discounted payback statistic for the projects are $2$ and $3$ years, respectively.

Time $0123$

Project A Cash Flow $-26,00016,00036,0007,000$

Project B Cash Flow $-36,00016,00014,00056,000$

Use the payback decision rule to evaluate these projects; which one$($s$)$ should it be accepted or rejected?Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of

both of their risk class is $8$ percent, and that the maximum allowable payback and discounted payback statistic for the projects is $2$ years for both.

Use the discounted payback decision rule to evaluate these projects; which one$($s$)$ should it be accepted or rejected?

Multiple Choice

accept neither A nor B

reject $A,$ accept $B$

accept A$,$ reject B

accept both A and $B$