E10–1 Elysian Fields, Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusive projects. Project Hydrogen requires an initial outlay of $25,000; project Helium requires an initial outlay of $35,000. Using the expected cash inflows given for each project in the following table, calculate each project’s payback period. Which project meets Elysian’s standards?

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Expected cash inflows Year Hydrogen Helium 1 $6,000 $7,000 2 6,000 7,000 3 8,000 8,000 4 4,000 5,000 5 3,500 5,000 6 2,000 4,000