Location requires an initial investment

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Pizza has finally narrowed down to two college towns, Collegeville and University City, to open their new location this August, just in time for the fall semester. The Collegeville location requires an initial investment of $126,000, whereas University City requires $185,000. From the student population and the competition, the finance people feel the revenue at Collegeville will be $48,000 a year and the revenue at University City will be $56,000. Assuming a hurdle rate of 15%, how long it will take to get the investment back for each location? Include the time value of money.

Reference no: EM13801730

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