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 $175,000 and each with an eight-year life and expected total net cash flows of $280,000. Location 1 is expected to provide equal annual net cash flows of $35,000, and Location 2 is expected to have the following unequal annual net cash flows: Year 1 $68,000 Year 5 $37,000 Year 2 51,000 Year 6 29,000 Year 3 33,000 Year 7 21,000 Year 4 23,000 Year 8 18,000 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 $175,000 and each with an eight-year life and expected total net cash flows of $280,000. Location 1 is expected to provide equal annual net cash flows of $35,000, and Location 2 is expected to have the following unequal annual net cash flows: Year 1 $68,000 Year 5 $37,000 Year 2 51,000 Year 6 29,000 Year 3 33,000 Year 7 21,000 Year 4 23,000 Year 8 18,000 Determine the cash payback period for both location proposals. Location 1 years Location 2 years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 $175,000 and each with an eight-year life and expected total net
| Year 1 | $68,000 | Year 5 | $37,000 | |
| Year 2 | 51,000 | Year 6 | 29,000 | |
| Year 3 | 33,000 | Year 7 | 21,000 | |
| Year 4 | 23,000 | Year 8 | 18,000 |
Determine the cash payback period for both location proposals.
| Location 1 | years |
| Location 2 | years |
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