E26-19

Using payback to make capital investment decisions Rapp Hardware is adding a new product line that will require an investment of Si,418,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $310,000 the first year, $290,000 the second year, and $2*50,000 each year thereafter for eight years. Compute the payback period. Round one decimal place