Jane's Clothing Inc. is evaluating two capital investment proposals for a retail outlet, 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: Year 1 $72,000 Year 2 54,000 Year 3 34,000 Year 4 51,000 Year 5 38,000 Year 6 29,000 Year 7 22,000 Year 8 20,000 Determine the cash payback period for both location proposals. Location 1 years Location 2 years

Jane's Clothing Inc. is evaluating two capital investment proposals for a retail outlet, 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: Year 1 $72,000 Year 2 54,000 Year 3 34,000 Year 4 51,000 Year 5 38,000 Year 6 29,000 Year 7 22,000 Year 8 20,000 Determine the cash payback period for both location proposals. Location 1 years Location 2 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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