Question
Cash payback period for a Service Company Prime Financial Inc. is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment
Cash payback period for a Service Company
Prime Financial Inc. is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $125,000 and each with an eight-year life and expected total net cash flows of $200,000. Location 1 is expected to provide equal annual net cash flows of $25,000, and Location 2 is expected to have the following unequal annual net cash flows:
| Year 1 | $56,000 | Year 5 | $18,000 | |
| Year 2 | 43,000 | Year 6 | 14,000 | |
| Year 3 | 26,000 | Year 7 | 11,000 | |
| Year 4 | 24,000 | Year 8 | 8,000 |
Determine the cash payback period for both location proposals.
| Location 1 | 1-8 years? |
| Location 2 | 1-8 years? |
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The Complete Guide To Operational Auditing 1995 Supplement
Authors: Harry R. Reider
1st Edition
0471102547, 978-0471102540
