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

Location 1

Payback period

= Cash outflow/Cash inflow

= $255,000/$51,000

5 years

Location 2

Year    Cashflow   Cumulative cashflow

                $                       $

0         (255,000)          (255,000)

1            82,000             (173,000)

2            61,000             (112,000)

3             41,000             (71,000)

4             33,000            (38,000)

5             20,000            (18,000)

6             18,000                 0

7              89,000

8               64,000

Payback period = 6 years

Explanation:

In location 1, we will divide the initial outlay by the annual cash inflows in order to obtain the payback period since the cash inflows are constant

In location 2, we deduct the initial outlay from the cashflow for each year until the cash inflow is fully recovered.

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.

answer; conceptual skills;