Janes Clothing Inc. is evaluating two capital investment proposals for a retail outlet, each requiring an investment of $225,000 and each with an eight-year life and expected total net cash flows of $360,000. Location 1 is expected to provide equal annual net cash flows of $45,000, and Location 2 is expected to have the following unequal annual net cash flows:

Year 1	$101,000
Year 2	77,000
Year 3	47,000
Year 4	43,000
Year 5	32,000
Year 6	24,000
Year 7	19,000
Year 8	17,000

Determine the cash payback period for both location proposals.

Location 1	years
Location 2	years

The following data are accumulated by Geddes Company in evaluating the purchase of $157,400 of equipment, having a four-year useful life:

	Net Income		Net Cash Flow
Year 1	$40,000		$68,000
Year 2	24,000		52,000
Year 3	12,000		39,000
Year 4	(1,000)		27,000

Present Value of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	0.890	0.826	0.797	0.756	0.694
3	0.840	0.751	0.712	0.658	0.579
4	0.792	0.683	0.636	0.572	0.482
5	0.747	0.621	0.567	0.497	0.402
6	0.705	0.564	0.507	0.432	0.335
7	0.665	0.513	0.452	0.376	0.279
8	0.627	0.467	0.404	0.327	0.233
9	0.592	0.424	0.361	0.284	0.194
10	0.558	0.386	0.322	0.247	0.162

a. Assuming that the desired rate of return is 12%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.

Present value of net cash flow	$fill in the blank 1
Amount to be invested	fill in the blank 2
Net present value	$fill in the blank 3

b. Would management be likely to look with favor on the proposal? , because the net present value indicates that the return on the proposal is than the minimum desired rate of return of 12%.