Haukea 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 Amount Year Amount Year 1 $78,000 Year 5 $42,000 Year 2 58,000 Year 6 34,000 Year 3 38,000 Year 7 24,000 Year 4 26,000 Year 8 20,000 Determine the cash payback period for both location proposals. Location Year Location 1 years Location 2 years
Haukea 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 Amount Year Amount Year 1 $78,000 Year 5 $42,000 Year 2 58,000 Year 6 34,000 Year 3 38,000 Year 7 24,000 Year 4 26,000 Year 8 20,000 Determine the cash payback period for both location proposals. Location Year Location 1 years Location 2 years
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Haukea 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 Amount Year Amount
Year 1 $78,000 Year 5 $42,000
Year 2 58,000 Year 6 34,000
Year 3 38,000 Year 7 24,000
Year 4 26,000 Year 8 20,000
Determine the cash payback period for both location proposals.
Location Year
Location 1
years
Location 2
years
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