Project a has a predicted payback period of 2.5 and project b has a predicted payback period of 5. based on this information we can conclude that select one: a. more information should be gathered before deciding on which project, if either, is desirable. b. project a is preferred to project b. c. project b provides twice the return of project a. d. project b is preferred to project a, but it is not necessarily twice as profitable.

A. more information should be gathered before deciding on which project, if either, is desirable.

Explanation:

The lower Payback Period is not sufficient information to decide which project is more profitable. The payback period indicates when in the life of a project the initial investment principal cash flow is achieved.

But to decide about a certain project it is better to know the interest yield, it is also important to get the life of the project and other information.

For example:

a.- 250 investment 100 per year  payback in 2.5-year life 3 years

b.- 500 investment 100 per year payback in 5-year life 20 years

While A payback occurs before project B is better

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