Newman Automobiles Manufacturing is considering two alternative investment proposals with the following data:

Proposal X Proposal Investment $ 10,200,000

Useful life 5 years

Estimated annual net cash inflows for 5 years $ 2, 040,000 $

Residual value $ 53,000

Depreciation method :Straight line

Required rate of return 12 %

Calculate the payback period for Proposal X.

a. 9 years

b. 8 years

c 4 years

d. 5 years