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 
Straightline 
Straightline 
Required rate of return 
12% 
10% 
Calculate Pay back period for Proposal X and Proposal Y.
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