1) Newman Automobiles Manufacturing is considering two alternative investment proposals with the following data: Proposal X Proposal Y Investment $12,000,000 $600,000 Useful life 8 years 8 years Estimated annual net cash inflows for 8 years $2,000,000 $95,000 Residual value $60,000 $30,000 Depreciation method Straight-line Straight-line Required rate of return 12% 10% Calculate Pay back period for Proposal X and Proposal Y.

1) Newman Automobiles Manufacturing is considering two alternative investment proposals with the following data: Proposal X Proposal Y Investment $12,000,000 $600,000 Useful life 8 years 8 years...

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

	Proposal X	Proposal Y
Investment	$12,000,000	$600,000
Useful life	8 years	8 years
Estimated annual net cash inflows for 8 years	$2,000,000	$95,000
Residual value	$60,000	$30,000
Depreciation method	Straight-line	Straight-line
Required rate of return	12%	10%

Calculate Pay back period for Proposal X and Proposal Y.

Jun 05, 2022

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