Determine cash payback period for both location proposals

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Problem - Cash payback period - Nations Trust is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $320,000 and each with an eight-year life and expected total net cash flows of $512,000. Location 1 is expected to provide equal annual net cash flows of $64,000, and Location 2 is expected to have the following unequal annual net cash flows:

Year 1

$110,000

Year 5

$48,000

Year 2

80,000

Year 6

48,000

Year 3

70,000

Year 7

48,000

Year 4

60,000

Year 8

48,000

Required - Determine the cash payback period for both location proposals.

Reference no: EM132690427

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