Question

Culver Inc. has two projects as follows:

Project		Initial CF		CF1		CF2		CF3		CF4
A		-2,540		940		1,290		1,040		1,990
B		-3,090		840		1,590		1,140		3,990

Culver set 2.6 years as a cut-off period for screening projects and the discount rate is 15 percent.

Which project(s) will be selected if the company uses the discounted payback period method? (Round intermediate calculations to 5 decimal places, e.g. 1.25125 and the final answers to 2 decimal places e.g. 1.25.)

Project A payback period		years
Project B payback period		years
Project A/Neither project/Project B will be selected.

Answer 1

Neither of the project should be accepted