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Question 12.PMCQ.4: (LO 1) Siegel Industries is considering two capital budgetin...

(LO 1) Siegel Industries is considering two capital budgeting projects. Project A requires an initial investment of $48,000. It is expected to produce net annual cash flows of $7,000. Project B requires an initial investment of $75,000 and is expected to produce net annual cash flows of $12,000. Using the cash payback technique to evaluate the two projects, Siegel should accept:
a. Project A because it has a shorter cash payback period.
b. Project B because it has a shorter cash payback period.
c. Project A because it requires a smaller initial investment.
d. Project B because it produces a larger net annual cash fl ow.

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