Question: A company is considering two projects. Project I Project II Initial investment $120,000 $120,000 Cash inflow Year 1 $40,000 $20,000 Cash inflow Year 2

A company is considering two projects. Project I Project II Initial investment $120,000 $120,000 Cash inflow Year 1 $40,000 $20,000 Cash inflow Year 2 $40,000 $20,000 Cash inflow Year 3 $40,000 $32,000 Cash inflow Year 4 $40,000 $48,000 Cash inflow Year 5 $40,000 $50,000 What is the payback period for Project I? a. 5 years b. 1 year Oc. 3 years Od. 2.5 years Oe. 3.5 years

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