First Charter Bank Corporation is evaluating two capital investment proposals for a drive-up ATM, each requiring an investment of $250,000 and each with an 8-year life and expected total net cash flows of $400,000. Location 1 is expected to provide equal annual net cash flows of $50,000, and Location 2 is expected to have the following unequal annual net cash flows:

Determine the cash payback period for bothproposals.

Transcribed Image Text:

Year $80,000 Year 5 $37,500 70,000 Year 6 50,000 Year 7 0000 Year 8 Year 2 Year 3 Year 4 37,500 37,500 37,500