Question: Your firm is considering two mutually exclusive projects with the cash flows shown below. The required rate of return on both projects is 8 percent.

Your firm is considering two mutually exclusive projects with the cash flows shown below. The required rate of return on both projects is 8 percent. The maximum allowable payback and discounted payback periods for both projects are 2 and 3 years, respectively. Use the NPV decision rule to evaluate these projects. Which projects should be accepted/rejected?

Time	0	1	2	3
Project A Cash Flow	-20,000	10,000	30,000	1,000
Project B Cash Flow	-30,000	10,000	20,000	50,000

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