Can you please explain how to solve this problem? Thank you!

O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,950,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,500,000. The following information is available: Required investment Estimated life 1 Estimated residual value Estimated annual cash inflows over the next 9 years Required rate of return | Indiana proposal Kentucky proposal | $1,950,000 $2,500,000 7 years 7 years $20,000 $70,000 $300,000 $800,000 11% 11% The payback period for the Indiana proposal is closest to 03.13 years. 0 6.50 years. 097.50 years. 0 6.96 years