Tulip Mania, Inc., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should they accept either of them?
|
Year
|
Cash Flow (A)
|
Cash Flow (B)
|
|
0
|
-$40,000
|
-$60,000
|
|
1
|
25,000
|
8,000
|
|
2
|
10,000
|
20,000
|
|
3
|
10,000
|
30,000
|
|
4
|
5,000
|
425,000
|