Reference no: EM132594306

Proposals L and K each cost $500,000, have 6-year lives, and have expected total cash flows of $720,000. Proposal L is expected to provide equal annual net cash flows of $120,000, while the net cash flows for Proposal K are as follows:

Year 1         $250,000

Year 2          200,000

Year 3           100,000

Year 4            90,000

Year 5             60,000

Year 6            20,000

                       $720,000

Question 1: Determine the cash payback period for each proposal.