Cash Payback Period for a Service Company

Fidelity Bancorp Inc. is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $280,000 and each with an eight-year life and expected total net cash flows of $448,000. Location 1 is expected to provide equal annual net cash flows of $56,000, and Location 2 is expected to have the following unequal annual net cash flows:

Year 1	$90,000		Year 5	$42,000
Year 2	70,000		Year 6	42,000
Year 3	60,000		Year 7	42,000
Year 4	60,000		Year 8	42,000

Determine the cash payback period for both location proposals.

Location 1
Location 2