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:	0	1	2	3
Project A Cash Flow	-21,000	11,000	31,000	2,000
Project B Cash Flow	-31,000	11,000	21,000	51,000

Use the NPV decision rule to evaluate these projects; which one(s) should be accepted or rejected? rev: 12_04_2012

accept both A and B - A

accept neither A nor B - B

accept A, reject B - C

reject A, accept B - D