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Rocco Manufacturing is considering following two investment proposals:
| | Proposal X | Proposal Y |
| Investment | $740,000 | $508,000 |
| Useful life | 5 years | 4 years |
| Estimated annual net cash inflows received at the end of each year | $154,000 | $92,000 |
| Residual value | $66,000 | $0 |
| Depreciation method | Straight-line | Straight-line |
| Annual discount rate | 10% | 9% |
Compute the present value of the future cash inflows from Proposal X.
Present value of an ordinary annuity of $1:
| | 8% | 9% | 10% |
| 1 | 0.926 | 0.917 | 0.909 |
| 2 | 1.783 | 1.759 | 1.736 |
| 3 | 2.577 | 2.531 | 2.487 |
| 4 | 3.312 | 3.240 | 3.170 |
| 5 | 3.993 | 3.890 | 3.791 |
| 6 | 4.623 | 4.486 | 4.355 |
Present value of $1:
| | 8% | 9% | 10% |
| 1 | 0.926 | 0.917 | 0.909 |
| 2 | 0.857 | 0.842 | 0.826 |
| 3 | 0.794 | 0.772 | 0.751 |
| 4 | 0.735 | 0.708 | 0.683 |
| 5 | 0.681 | 0.650 | 0.621 |
| 6 | 0.630 | 0.596 | 0.564 |
A.
$762,136
B.
$668,128
C.
$624,800
D.
$583,814
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