1) Gomez Corporation is considering two alternative investment proposals with the following data:

	Proposal X	Proposal Y
Investment	$850,000	$468,000
Useful life	8 years	8 years
Estimated annual net cash inflows for 8 years	$125,000	$78,000
Residual value	$40,000	$ -
Depreciation method	Straight-line	Straight-line
Required rate of return	14%	10%

How long is the payback period for Proposal X?

A) 10.90 years

B) 6.00 years

C) 6.80 years

D) 21.25 years

PLEASE SHOW ANSWER AND PROVIDE EXPLANATION!