Karen Calloway is considering adding a new style of gym shorts to her product line. She has determined that it would require an investment of $22,000 to add the new style shorts.

She believes that the cash inflows would grow each year as the new style becomes more popular. She has made the following cash inflow estimates:

Required: Determine the payback period for the new style of gym shorts.

Transcribed Image Text:

First year $4,000 Second year $6,000 Third and subsequent years $10,000