Novak Inc. is contemplating a capital investment of $108000. The cash flows over the projects four years are:

Expected Annual. Expected Annual.

Year. Cash Inflows. Cash Outflows.

1. $36000 $12000

2. 65000 17000

3. 75000 30000

4. 70000 40000

The cash payback period is

3.09 years.

4.20 years.

3.69 years.

2.16 years.