McKernan Inc. imposes a payback cutoff of three years for its international investment projects. The...
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McKernan Inc. imposes a payback cutoff of three years for its international investment projects. The company has the following two projects
| Year | Cash Flow (A) | Cash Flow (B) | |||||
| 0 | $ | 104,200 | $ | 121,000 | |||
| 1 | 40,000 | 32,000 | |||||
| 2 | 45,000 | 35,000 | |||||
| 3 | 38,000 | 43,000 | |||||
| 4 | 25,000 | 247,000 | |||||
What is the payback period for both projects? (Round the final answers to 2 decimal places.)
| Payback period | |
| Project A | years |
| Project B | years |
Which project should the company accept?
Project A
Project B
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