Let the following two mutually exculsive projects, each of which need the initial investment of $30,000 and give cash inflows of $60,000 as given below. This organization has 15% cost of capital.
Year Project A Project B
0 ($30,000) ($30,000)
1 $30,000 $10,000
2 $20,000 $20,000
3 $10,000 $30,000
Using above paybak criterion, which is the most desirable project?
project A, project B, both & A & B are equally suitable, or niether A or B are acceptable - explain answer and why?