Net Present Value Analysis Hermson Company must evaluate two capital expenditure proposals. Hermsons cutoff rate is 12%. Data for the two proposals follow.

	Proposal X	Proposal Y
Required investment	$140,000	$140,000
Annual after-tax cash inflows	33,000
After-tax cash inflows at the end of years 3, 6, 9, and 12		99,000
Life of project	12 years	12 years

What is the cash payback period for Proposal X? For Proposal Y?

Hint: For Proposal Y, in what year (3, 6, 9 or 12) will the full original investment be recovered?

Round Proposal X answer to one decimal place, if applicable.

Proposal X

Answer years

Proposal Y

Answer years