Chapter 26, Problem 26.5EX

To determine

Cash payback method:

Cash payback period is the expected time period which is required to recover the cost of investment. It is one of the capital investment method used by the management to evaluate the long-term investment (fixed assets) of the business.

Cash flow:

Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.

The cash payback period for location 1 and location 2 proposals.