Question: 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

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 11 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively. Time: 0 1 2 3 Project A Cash Flow -28,000 18,000 38,000 9,000 Project B Cash Flow -38,000 18,000 28,000 58,000 Use the PI decision rule to evaluate these projects; which one(s) should be accepted or rejected?

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