Primera Banco is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $255,000 and each with an eight-year life and expected total net cash flows of $408,000. Location 1 is expected to provide equal annual net cash flows of $51,000, and Location 2 is expected to have the following unequal annual net cash flows:
Year 1 - $82,000
Year 2 - 61,000
Year 3 - 41,000
Year 4 - 33,000
Year 5 - 20,000
Year 6 - 18,000
Year 7 - 89,000
Year 8 - 64,000
Determine the cash payback period for both location proposals
Location 1
years
Location 2
years
+2
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Home » Business » Primera Banco is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $255,000 and each with an eight-year life and expected total net cash flows of $408,000.