The Warren Company is considering investing in two alternative projects: Project 1 Project 2 Investment $400,000 $250,000 Useful life (years) 5 6 Estimated annual net cash inflows for useful life $100,000 $45,000 Residual value $25,000 $15,000 Depreciation method Straightminusline Straightminusline Required rate of return 12% 8% What is the payback period for Project 1?

A. 5.56 years

B. 4.00 years

C. 8.89 years

D. 16.00 years