Gas Solutions, Inc., is an oil and gase company based in London. Management uses a maximum payback period of 5 years and currently must choose between two mutually exclusive projects. The Natural Gas project requires and initial outlay of 25,000 Pounds. Project Hydrogen requires an initial outlay of 35,000 Pounds. Using the expected cash inflows given for each project in the following table, calculate each projects payback period. What is the payback period on each project and which project meets Gas Solutions standards?

Expected cash inflows Year Natural Gas (in pounds) Hydrogen (in pounds) 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