Question: The Jake in the Box is considering two projects, both of which have an initial cost of $35,000 and total cash inflows of $50,000. Specifically,
The Jake in the Box is considering two projects, both of which have an initial cost of $35,000 and total cash inflows of $50,000. Specifically, the cash inflows of project A are $5,000, $10,000, $15,000, and $20,000 over the next four years, respectively. The cash inflows for project B are $10,000, $5,000, $5,000, and $30,000 over the next four years, respectively. Which one of the following statements is correct if The Jake requires a 13 percent rate of return and has a required discounted payback period of 3 years? O a. Both projects should be accepted. O b. Both projects should be rejected. O c. Project A should be accepted and project B should be rejected. O d. Project A should be rejected and project B should be accepted. e. You should be indifferent to accepting either or both projects
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