Wyoming Woodworks is evaluating two capital investment proposals for a retail outlet store, each requiring an investment

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Wyoming Woodworks is evaluating two capital investment proposals for a retail outlet store, each requiring an investment of $1,000,000 and each with a five-year life and expected total net cash flows of $1,250,000. Location 1 is expected to provide equal annual net cash flows of $250,000, and Location 2 is expected to have the following unequal annual net cash flows:
Year 1.......................$400,000
Year 2.........................375,000
Year 3.........................225,000
Year 4.........................175,000
Year 5...........................75,000
Determine the cash payback period for both location proposals.
Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...
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