#29

Redwood Corporation is considering two alternative investment proposals with the following data:

	Proposal X	Proposal Y
Investment	$ $830,000	$ $534,000
Useful life	7 years	7 years
Estimated annual net cash inflows for 77 years	$ $120,000	$ $84,000
Residual value	$ $31,000	$
Depreciation method	Straightline	Straightline
Required rate of return	10%	7%

How long is the payback period for Proposal Y?

#31

Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows:

Sales	$$2,300,000
Operating income	$$414,000
Total assets	$$718,750
Current liabilities	$ $190,000
Target rate of return	11%
Weighted average cost of capital	5%

What is The Portland Porcelain Works Coffee Mug Division return on investment?