Question: Project A as well as project B require an initial investment of $1,050,000, have a 6-year life, and have expected total cash inflows of $1,680,000.
Project A as well as project B require an initial investment of $1,050,000, have a 6-year life, and have expected total cash inflows of $1,680,000. Proposal A is expected to provide an annual net cash inflow of $280,000, while the annual net cash inflows for Proposal B are as follows:
| Year 1 | $350,000 |
| Year 2 | $315,000 |
| Year 3 | $280,000 |
| Year 4 | $280,000 |
| Year 5 | $245,000 |
| Year 6 | $210,000 |
Determine the cash payback period for each proposal. Round your answers to two decimal places.
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