Staple Company is considering two capital investment proposals. Estimates regarding each project are provided below:
Project Beans Project Rice
Initial investment $400,000 $600,000
Annual net income 20,000 42,000
Net annual cash flow 100,000 142,000
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

What is the cash payback period for Project Beans?
a. 20 years.
b. 10 years.
c. 5 years.
d. 4 years.