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

	Project Red	Project Blue
Capital investment	$400,000	$560,000
Annual net income	$50,000	$80,000
Annual cash flows	$100,000	$150,000
Estimated useful life	8 years	8 years

Savanna requires an 8% rate of return on all new investments.

Part (a): Compute the payback period for each project. Part (b): Compute the net present value for each project. Part (c): Compute the accounting rate of return for each project. Part (d): Which project should Savanna select?