4

Sikes Hardware is adding a new product line that will require an investment of $1,480,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $330,000 the first year, $300,000 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 + v/ Expected annual net cash inflow ) = Payback Amount to complete recovery in next year Initial investment Residual value Total net cash inflows