Platte Woodworks is evaluating two capital investment proposals for a retail outlet store, each…

Platte Woodworks is evaluating two capital investment proposals for a retail outlet store, each requiring an investment of $350,000 and each with an eight-year life and expected total net cash flows of $560,000. Location 1 is expected to provide equal annual net cash flows of $70,000, and Location 2 is expected to have the following unequal annual net cash flows:Year 1 $125,000Year 2 85,000Year 3 70,000Year 4 70,000Year 5 70,000Year 6 60,000Year 7 40,000Year 8 40,000Determine the cash payback period for both location proposals.View Solution:
Platte Woodworks is evaluating two capital investment proposals for a