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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
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 $30,000; project Helium requires an initial outlay of $34,000. Using the expected cash inflows given for each project in the following table,
Expected cash inflows | ||||
Year | Hydrogen | Helium | ||
1 | $5,500 | $6,000 | ||
2 | $7,000 | $8,000 | ||
3 | $9,000 | $7,500 | ||
4 | $5,000 | $6,000 | ||
5 | $4,000 | $6,000 | ||
6 | $1,000 | $3,500 |
calculate each project's payback period. Which project meetsElysian's standards?
The payback period of project Hydrogen is ___ years
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