Your selection committee is debating between two projects. Project A has a payback period of 18 months. Project B has a cost of $125,000 with expected cash inflows of $50,000 the first year and $25,000 per quarter after that. Which project should you recommend?
A. Either Project A or Project B because the payback periods are equal
B. Project A because Project B's payback period is 21 months
C. Project A because Project B's payback period is 24 months
D. Project A because Project B's payback period is 20 months
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Answer Posted / Abhay Jindal
A. Either Project A or Project B because the payback periods are equal
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