Question

Offshore Drilling Products, Inc., imposes a payback cutoff of three years for its international investment projects....

Offshore Drilling Products, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available.
Year Cash Flow A Cash Flow B
0 –$ 49,000      –$ 94,000     
1 19,000      21,000     
2 25,400      26,000     
3 21,000      33,000     
4 7,000      246,000     
Requirement 1:

What is the payback period for each project? (Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Payback period
  Project A years  
  Project B years
Requirement 2:
Should it accept either of them?
(Click to select)Accept project B and reject project A Accept both projects A and B Accept project A and reject project BReject both projects A and B  
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