Samuelson Electronics Has a Required Payback Period of Three Years

question 87

Multiple Choice

Samuelson Electronics has a required payback period of three years for all of its projects. Currently, the firm is analyzing two independent projects. Project A has an expected payback period of 2.9 years and a net present value of $4,200. Project B has an expected payback period of 3.1 years with a net present value of $26,400. Which project(s) should be accepted based on the payback decision rule? 

• A) Project A only 
• B) Project B only 
• C) Both A and B 
• D) Neither A nor B 
• E) Either, but not both projects 

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