Larkspur Inc. is contemplating a capital investment of $78000. The cash flows over the project’s four years are: 

Expected Annual	Expected Annual
Year	Cash Inflows	Cash Outflows
1	$38000	$12000
2	28000	20000
3	60000	24000
4	50000	30000

The cash payback period is 

2.33 years.3.40 years.3.42 years.3.20 years.