Robinson Hardware is adding a new product line that will require an investment of $1,550,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $330,000 the first year, $275,000 the second year, and $250,000 each year thereafter for eight years. The investment has no residual value. Compute the payback period. First enter the formula, then calculate the payback period. (Round your answer to two decimal places.) Full years + ( Amount to complete recovery in next year / Projected cash inflow in next year ) = Payback 5 + ( $195,000 / $250,000 ) = 5.78 years

Robinson Hardware is adding a new product line that will require an investment of  $1,550,000.

Managers estimate that this investment will have a  10-year life and generate net cash inflows of

$330,000 the first  year, $275,000 the second  year, and $250,000 each year thereafter for eight years. The investment has no residual value. Compute the payback period.

First enter the  formula, then calculate the payback period. (Round your answer to two decimal  places.)

Full years

+ (

Amount to complete recovery in next year

/

Projected cash inflow in next year

) =

Payback

5

+ (

$195,000

/

$250,000

) =

5.78

years