Determine the cash payback period for each proposal

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Question - Proposals M and N each cost $600,000, 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

Determine the cash payback period for each proposal, and chose between Proposal M and N.

Calculate the net present value of proposal M and N assuming a desired rate of 6%. Choose between proposal M and N.

Reference no: EM131611634

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