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Buffett's Car Wash Inc. is considering two projects, A and B. Project A has the following cash flow and WACC data. Project A WACC: 10.00% Year 0 1 N 3 Cash flows -$900 $500 $500 $500 The CFO of this firm estimated Project B's discounted payback period as 2.7 years. Assume that the firm is using only discounted payback method to make its capital budgeting decision and has no limit for capital expenditures. If the two projects are independent and the target cutoff period is 3 years, which project(s) should the firm undertake? Why? 1) Project A since the discounted payback period for Project A is shorter than for Project B. 2) Project B since the discounted payback period for Project B is longer than for Project A. 3) Accept both projects since the discounted payback periods for both projects are within the target cutoff period. 4) Reject both projects since the discounted payback periods for both projects are within the target cutoff period. 5) Insufficient information is given. The CFO of this firm estimated Project B's discounted payback period as 2.7 years. Assume that the firm is using only discounted payback method to make its capital budgeting decision and has no limit for capital expenditures. If the two projects are mutually exclusive and the target cutoff period is 3 years, which project(s) should the firm undertake? Why? 1) Project A since the discounted payback period for Project A is shorter than for Project B. 2) Project B since the discounted payback period for Project B is longer than for Project A. 3) Accept both projects since the discounted payback periods for both projects are within the target cutoff period. 4) Reject both projects since the discounted payback periods for both projects are within the target cutoff period. 5) Insufficient information is given