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7) Nubela Manufacturing is considering two alternative investment proposals with the following data: Investment Useful life Estimated annual net cash inflows for 5 years Residual

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7) Nubela Manufacturing is considering two alternative investment proposals with the following data: Investment Useful life Estimated annual net cash inflows for 5 years Residual value Depreciation method Required rate of return ProposalX $10.700.000 5 years $2,140,000 $50,000 Straight-line 122 Proposal Y $580.000 5 years $103,000 $26,000 Straight-line 1393 Calculate the payback period for Proposal X A) 4 years B) 5 years C) 9 years D) 8 years 8) Gateway Graphics is considering an investment in new printing equipment costing $502,000. The equipment will be depreciated on a straight-line basis over a five-year life and is expected to generate net cash inflows of $122,000 the first year, 5158,000 the second year, and $160.000 every year thereafter until the fifth year. What is the payback period for this investment? The residual value is zero. (Round your answer to two decimal places.) A) 4.30 years B) 2.80 years 03.39 years D) 3.11 years 9) Which capital budgeting method uses accrual accounting, rather than net cash inflows, as a basis for calculations? A) internal rate of return B) net present value C) accounting rate of retum D) payback 10) Tiberius Manufacturing is considering two alternative investment proposals with the following data ProposalX $10,500,000 5 years $2,100,000 $52,000 Straight-line 139 Proposal Y $500,000 5 years $105,000 Investment Useful life Estimated annual net cash inflows for 5 years Residual value Depreciation method Required rate of return Straight-line 1292 Calculate the accounting rate of return for Proposal Y. (Round any intermediate calculations and your final answer to two decimal places.) A) 12.63% B) 4.29% 9.52% D) 13.87%

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