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 | –$ | 75,600 | –$ | 88,000 | |||
| 1 | 29,000 | 21,000 | |||||
| 2 | 34,000 | 24,000 | |||||
| 3 | 27,000 | 32,000 | |||||
| 4 | 14,000 | 236,000 | |||||
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?
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