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Prime Financial Inc. is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $180,000 and each with an eight-year
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Prime Financial Inc. is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $180,000 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 $81,000 Year 5 $43,000 Year 2 61,000 Year 6 32,000 Year 3 38,000 Year 7 25,000 Year 4 58,000 Year 8 22,000
Determine the cash payback period for both location proposals.
Location 1 ___ years Location 2 ___ years
Prime Financial Inc. is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $180,000 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 | $81,000 | Year 5 | $43,000 | |
| Year 2 | 61,000 | Year 6 | 32,000 | |
| Year 3 | 38,000 | Year 7 | 25,000 | |
| Year 4 | 58,000 | Year 8 | 22,000 |
Determine the cash payback period for both location proposals.
| Location 1 | ___ years |
| Location 2 | ___ years |
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