If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will rank highest?
Project A Project B
Time 0 -10,000 -10,000
Time 1 5,000 4,000
Time 2 4,000 3,000
Time 3 3,000 10,000
A) Project A
B) Project B
C) Project A and Project B have the same ranking.
D) Cannot calculate a payback period without a discount rate.
Answer: A
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