Chapter 12 Application Taylor1 Inc. Taylor1 Inc. is considering proposals to open grocery stores in three different locations The initial investment has a useful life of 5 years and no residual (salvage) value Initial Investment Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Total Cash Flows Location A Location B Location C $5,000,000 $5,000,000 $5,000,000 700,000 1,000,000 3,000,000 750,000 3,000,000 2,000,000 800,000 5,000,000 2,000,000 850,000 1,000,000 5,900,000 1,000,000 $9,000,000 $9,000,000 $9,000,000 Rank each location using (Best/most favorable option = 1; least = 3) the following two methods: 1 Payback period 2 IRR Proposal Location A Location B Location C Payback Period IRR