Use the information for the question(s) below.

-If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will WiseGuy Inc. prefer?
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.

Question

Use the information for the question(s) below.
 
-If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will WiseGuy Inc. prefer?
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.

Quizplus · Accepted Answer

Project B has a shorter payback period (2 years) compared to Project A (3 years). Therefore, WiseGuy Inc. would prefer Project B over Project A.

Use the Information for the Question(s) Below