Question: Two mutually exclusive projects are under consideration: Year Project A Project B 0 -$5,075 -$12,000 1 2,450 3,000 2 2,450 4,000 3 2,450 5,000 4

Two mutually exclusive projects are under consideration:

Year Project A Project B
0 -$5,075 -$12,000
1 2,450 3,000
2 2,450 4,000
3 2,450 5,000
4 2,450 6,000
5 2,450 7,000

Which project should be selected if the simple payback method is used to make the determination?

Group of answer choices

B; its payback period is longer

A; its payback period is shorter

Not enough information

Please explain and show formulas !

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