Question
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
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
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Financial and Managerial Accounting the basis for business decisions
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
17th edition
007802577X, 978-0078025778
