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Proposals M and N each cost $1,000,000, have 6-year lives, and have expected total cash flows...

Proposals M and N each cost $1,000,000, have 6-year lives, and have expected total cash flows of $1,200,000. Proposal M is expected to provide equal annual net cash flows of $200,000, while the net cash flows for Proposal N are as follows:

Year 1

$450,000

Year 2

$200,000

Year 3

$150,000

Year 4

$100,000

Year 5

$175,000

Year 6

$125,000

Determine the cash payback period for each proposal. Show all calculations. Rounds answers to 2 decimal place.

If resources are limited, which proposal should the company invest in? Why.

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