Hardware is adding a new product line that will require an investment of

$1,500,000.

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

$315,000

the first year,

$280,000

the second year, and

$255,000

each year thereafter for eight years. The investment has no residual value. Compute the payback period.

Question content area bottom

Part 1

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

Part 2

+ (

) =

years