QUESTION 10

1. Muffins co. is considering to modernize its production facilities and it has two proposals under consideration. The expected cash flows associated with these projects is as follows. The discount rate associated with both the projects is 12%.

   Calculate payback for proposal 1

   Years	Proposal 1- $	Proposal 2- $
   0	(40,000)	(64000)
   1	18000	10000
   2	24000	32000
   3	32000	19000
   4	11000	25000