Question: The Square Box is considering two independent projects with an initial cost of $18,000 each. The cash inflows of Project A are $3,000, $7,000, and

The Square Box is considering two independent projects with an initial cost

The Square Box is considering two independent projects with an initial cost of $18,000 each. The cash inflows of Project A are $3,000, $7,000, and $10,000 for Years 1 to 3, respectively. The cash inflows for Project B are $3,000, $7,000, and $15,000 for Years 1 to 3, respectively. The required return is 12 percent and the required discounted payback period is 3 years. Based on discounted payback, which project(s), if either, should be accepted? Project A should be accepted and Project B should be rejected. Project A should be rejected and Project B should be accepted. You should be indifferent to accepting either or both projects. Both projects should be rejected. Both projects should be accepted.

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