Based strictly on the payback method, which project is preferred? A)
Based strictly on the payback method, which project is preferred?
A) Project A because the payback for A of 1.92 years is less than the payback for B of 2.23 years.
B) Project A because the payback for A of 2.23 years is greater than the payback for B of 1.92 years.
C) Project B because the payback for B of 2.23 years is greater than the payback for A of 1.92 years.
D) Project B because the sum of the total cash inflows less the outflows = $20,000 for B but only $14,000 for A.
ANSWER
A
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