Question

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 $125,000
Year 2 85,000
Year 3 70,000
Year 4 70,000
Year 5 70,000
Year 6 60,000
Year 7 40,000
Year 8 40,000
Determine the cash payback period for both location proposals.



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  • CreatedFebruary 04, 2014
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