Volkswagen AG (VW) uses a maximum payback period of 4 years and currently must choose between two mutually exclusive electric car projects. Project Crozz requires an initial outlay of €25,000,000; Project Buzz requires an initial outlay of €15,000,000. Using the expected cash inflows given for each project in the following table, calculate each project’s payback period. Which project meets VW’s standards?

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Year 1 2 3 4 5 6 Expected cash inflows (CF,) Crozz Buzz 6,000,000 5,000,000 5,000,000 4,000,000 3,000,000 3,000,000 4,000,000 4,000,000 4,000,000 4,000,000 3,000,000 3,000,000