You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight$-$line depreciation to a zero book value over the life of the project.

Neither project has any salvage value. Based upon the discounted payback period and the information provided in the problem, you should:

Project A Project B

Year Cash flow Cash flow

$0-75,000-70,000$

$119,00010,000$

$248,00016,000$

$312,00072,000$

Required rate of return $10\%13\%$

Required payback period $2\mathrm{.}0$ years $2\mathrm{.}0$ years

Required AAR $8\%11\%$

A$.$ accept both project A and project B$.$

B$.$ reject both project A and project B$.$

C$.$ accept project A and reject project B$.$