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Joe's Hardware is adding a new product line that will require an investment of $1,450.000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $310,000 the first year, $275,000 the second year, and $235,000 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 5 +( Projected cash inflow in next year )= Payback years

Joe's Hardware is adding a new product line that will require an investment of $1,450.000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $310,000 the first year, $275,000 the second year, and $235,000 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 5 +( Projected cash inflow in next year )= Payback years

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Joe's Hardware is adding a new product line that will require an investment of $1,450.000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $310,000 the first year, $275,000 the second year, and $235,000 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 5 +( Amount to complete recovery in next year Projected cash inflow in next year )= Payback years
Transcribed Image Text:Joe's Hardware is adding a new product line that will require an investment of $1,450.000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $310,000 the first year, $275,000 the second year, and $235,000 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 5 +( Amount to complete recovery in next year Projected cash inflow in next year )= Payback years
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