Cash Payback Period for a Service Company Jane's Clothing Inc. is evaluating two capital investment proposals for a retail outlet, each requiring an investment of $200,000 and each with an eight- year life and expected total net cash flows of $320,000. Location 1 is expected to provide equal annual net cash flows of $40,000, and Location 2 is expected to have the following unequal annual net cash flows: Year 1 $90,000 Year 2 68,000 Year 3 42,000 Year 4 38,000 Year 5 29,000 Year 6 22,000 Year 7 17,000 Year 8 14,000 Determine the cash payback period for both location proposals. Location 1 years Location 2 4 X years

Cash Payback Period for a Service Company Jane's Clothing Inc. is evaluating two capital investment proposals for a retail outlet, each requiring an investment of $200,000 and each with an eight- year life and expected total net cash flows of $320,000. Location 1 is expected to provide equal annual net cash flows of $40,000, and Location 2 is expected to have the following unequal annual net cash flows: Year 1 $90,000 Year 2 68,000 Year 3 42,000 Year 4 38,000 Year 5 29,000 Year 6 22,000 Year 7 17,000 Year 8 14,000 Determine the cash payback period for both location proposals. Location 1 years Location 2 4 X years

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cash Payback Period for a Service Company
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