Proposals M and N each cost $550,000, have 6-year lives, and have expected total cash flows of $750,000. Proposal M is expected to provide equal annual net cash flows of $125,000, while the net cash flows for Proposal N are as follows: Year 1   $250,000 Year 2   200,000 Year 3   150,000 Year 4   75,000 Year 5   50,000 Year 6   25,000     $750,000   Determine the cash payback period for each proposal. Round your answers to three decimal places.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...
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Proposals M and N each cost $550,000, have 6-year lives, and have expected total cash flows of $750,000. Proposal M is expected to provide equal annual net cash flows of $125,000, while the net cash flows for Proposal N are as follows:

Year 1   $250,000
Year 2   200,000
Year 3   150,000
Year 4   75,000
Year 5   50,000
Year 6   25,000
    $750,000

 

Determine the cash payback period for each proposal. Round your answers to three decimal places.

Proposal M ________?_______ years
Proposal N  ________?________years
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