Cash Payback Period for a Service Company

Janes Clothing Inc. is evaluating two capital investment proposals for a retail outlet, each requiring an investment of $120,000 and each with an eight-year life and expected total net cash flows of $240,000. Location 1 is expected to provide equal annual net cash flows of $30,000, and Location 2 is expected to have the following unequal annual net cash flows:

Year 1	$54,000
Year 2	41,000
Year 3	25,000
Year 4	38,000
Year 5	29,000
Year 6	22,000
Year 7	17,000
Year 8	14,000

Determine the cash payback period for both location proposals.

Location 1	years
Location 2	years