Roger Industries is considering two capital investment proposals. Estimates regarding each project are provided below:

	Project XR8		Project AAA
Initial investment	$800,000		$1,200,000
Annual net income	40,000		84,000
Net annual cash inflow	200,000		284,000
Estimated useful life	5 years		6 years
Salvage value	0		0

The company requires a 10% rate of return on all new investments.

Present Value of an Annuity of 1

Periods		9%		10%		11%		12%
5		3.890		3.791		3.696		3.605
6		4.486		4.355		4.231		4.111

The cash payback period for Project XR8 is

10 years.

4 years.

5 years.

20 years.