Corey Is Considering Two Projects Both of Which Have an Initial

Multiple Choice

Corey is considering two projects both of which have an initial cost of $20,000 and total cash inflows of $25,000. The cash inflows of project A are $3,000, $5,000, $8,000, and $9,000 over the
Next four years, respectively. The cash inflows for project B are $9,000, $8,000, $5,000, and
$3,000 over the next four years, respectively. Which one of the following statements is correct if
Corey requires a 10 percent rate of return and has a required discounted payback period of 3
Years?

A) Both projects should be accepted.
B) Both projects should be rejected.
C) Project A should be accepted and project B should be rejected.
D) Project A should be rejected and project B should be accepted.
E) You should be indifferent to accepting either or both projects.