Project A can be accepted because the payback period is 2.5 years but Project B

Question

Project A can be accepted because the payback period is 2.5 years but Project B can not be accepted because it's payback period is longer than 3 years. Project B should be accepted because even thought the payback period is 2.5 years for project A and 3.001 project B, there is a $1,000,000 payoff in the 4th year in Project B. Project B should be accepted because you get more money paid back in the long run. Both projects can be accepted because the payback is less than 3 years. Project A can be accepted because the payback period is 2.5 years but Project B can not be accepted because it's payback period is longer than 3 years. Project B should be accepted because even thought the payback period is 2.5 years for project A and 3.001 project B, there is a $1,000,000 payoff in the 4th year in Project B. Project B should be accepted because you get more money paid back in the long run. Both projects can be accepted because the payback is less than 3 years.

Explanation / Answer

Project A can be accepted because the payback period is 2.5 years but Project B can not be accepted because it's payback period is longer than 3 years

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