Evaluate the Following Projects Using the Payback Method Assuming a Rule

Multiple Choice

Evaluate the following projects using the payback method assuming a rule of 3 years for payback.

A) Project A can be accepted because the payback period is 2.5 years but Project B can not be accepted because it's payback period is longer than 3 years.
B) Project B should be accepted because even thought the payback period is 2.5 years for project A and 3.001 project B, there is a $1,000,000 payoff in the 4th year in Project B.
C) Project B should be accepted because you get more money paid back in the long run.
D) Both projects can be accepted because the payback is less than 3 years.