Cash payback period for a service company Haukea Clothing Inc. is evaluating two capital investment proposals for a retail outlet, 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: $79,000 Year 5 60,000 Year 6 Year 7 Year 8 Determine the cash payback period for both location proposals. Year 1 Year 2 Year 3 Year 4 Location 1 Location 2 36,000 34,000 years years $25,000 19,000 15,000 12,000

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