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

	Proposal X	Proposal Y
Investment	$11,400,000	$580,000
Useful life	5 years	5 years
Estimated annual net cash inflows for 5 years	$2,280,000	$97,000
Residual value	$51,000	$20,000
Depreciation method	Straightline	Straightline
Required rate of return	14%	13%

Calculate the payback period for Proposal X.

Question content area bottom

Part 1

A.

8

years

B.

4

years

C.

9

years

D.

5

years