JP Company Is Considering Two Capital Investment Proposals The Company Requires an 11% Rate of Return on All

Multiple Choice

JP Company is considering two capital investment proposals. Estimates regarding each project are provided below: $\begin{array}{lr}&\text { Project Echo}&\text { Project Charlie }\\\text { Initial investment } & \$ 400,000&\$600,000 \\\text { Annual net income } & 20,000 &42,000\\\text { Net annual cash inflow } & 100,000&142,000 \\\text { Estimated useful life } & 5 \text { years } &6 \text { years } \\\text { Salvage value } & 0&0\end{array}$ The company requires an 11% rate of return on all new investments. The cash payback period for Project Echo is

A) 20 years.
B) 10 years.
C) 5 years.
D) 4 years.