Cash payback period for a Service Company Prime Financial Inc. is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $160,000 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: $72,000 Year 1 Year 5 $38,000 Year 2 54,000 Year 6 29,000 34,000 Year 3 Year 7 22,000 Year 8 Year 4 51,000 20,000 Determine the cash payback period for both location proposals. Location 1 years Location 2 years
Cash payback period for a Service Company Prime Financial Inc. is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $160,000 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: $72,000 Year 1 Year 5 $38,000 Year 2 54,000 Year 6 29,000 34,000 Year 3 Year 7 22,000 Year 8 Year 4 51,000 20,000 Determine the cash payback period for both location proposals. Location 1 years Location 2 years
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 5E: Cash payback period for a service company Janes Clothing Inc. is evaluating two capital investment...
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