Savanna Company is considering two capital investment proposals. Relevant data on each project are as follows:

Savanna Company is considering two capital investment proposals. Relevant data on each project are as follows: Project Red Project Blue Capital investment $440,000 640,000 Annual net income 25,000 60,000 Estimated useful life 8 years 8 years Depreciation is computed by the straight-line method with no salvage value. Savanna requires an 8% rate of return on all new investments. The present value of 1 for 8 periods at 8% is .540 and the present value of an annuity of 1 for 8 periods is 5.747. Compute the cash payback period for each project. (Round answers to 1 decimal places, e.g. 15.2.) Project Red Project Blue Cash payback period years years Compute the net present value for each project. Project Red Project Blue Compute the annual rate of return for each project. (Round answers to 1 decimal places, e3. 15.2.) Project Red Project Blue Annual rate of return % % Which project should Savanna select