Question: An Electronics firm has a required payback period of 3 years for all of its projects. Currently the firm is analyzing two independent projects. Project A has an expected payback period of 2.8 yrs and a net present value of $6,900. Project B has and expected payback period of 3.1 years with a net present value of $28,400. Which project should be accepted based on the payback decision rule?
- Project A only
- Project B only
- Both A and B
- Neither A nor B
- Answer cannot be determined based on the information given