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Nylan Manufacturing is considering two alternative investment proposals with the following details:

Proposal X

Proposal Y

Investment

$720,000

$500,000

Useful life

5 years

4 years

Estimated annual net cash inflows

$150,000

$90,000

Residual value

$50,000

$0

Depreciation method

Straightminus-line

Straightminus-line

Discount rate

10%

9%

What is the total present value of future cash inflows from Proposal Y?

8%

9%

10%

1

0.926

$0.92

0.909

2

1.783

1.759

1.736

3

2.577

2.531

2.487

4

3.312

3.24

3.17

5

3.993

3.89

3.791

6

4.623

4.486

4.355

A. $291,600
B. $250,000
C. $266,750
D. $290,000

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