North Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $12,000,000; it will enable the company to increase its annual cash inflow by $4,000,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $24,000,000; it will enable the company to increase annual cash flow by $6,000,000 per year. This plane has an eight-year useful life and a zero salvage value. Required:


Determine the payback period for each investment alternative and identify the alternative North should accept if the decision is based on the payback approach.