Deacon Corporation has provided the following financial data from its balance sheet and income statement:

	Year 2	Year 1
Total assets	$1,270,000	$1,211,000
Total liabilities	$568,000	$461,400
Total stockholders' equity	$733,700	$820,000
Net operating income (income before interest and taxes)	$69,321
Interest expense	$29,000

The company's debt-to-equity ratio at the end of Year 2 is closest to:

2. (Ignore income taxes in this problem.) The management of Helberg Corporation is considering a project that would require an investment of $188,000 and would last for 6 years. The annual net operating income from the project would be $105,000, which includes depreciation of $20,000. The scrap value of the project's assets at the end of the project would be $19,600. The cash inflows occur evenly throughout the year. The payback period of the project is closest to:

1.5 years

1.3 years

1.8 years

1.5 years