Archer Hardware is adding a new product line that will require an investment of $2,000,000. Managers estimate

Question:

Archer Hardware is adding a new product line that will require an investment of $2,000,000.

Managers estimate that this investment will have a 10-year life and generate net cash inflows of $650,000 the first year, $490,000 the second year, and $250,000 each year thereafter for eight years. The investment has no residual value. Compute the payback period.