Question 23

The following details are provided by a manufacturing company:

	Product line
Investment	$1,100,000
Useful life	12 years
Estimated annual net cash inflows for first year	$400,000
Estimated annual net cash inflows for second year	$390,000
Estimated annual net cash inflows for next ten years	$380,000
Residual value	$70,000
Depreciation method	Straight-line
Required rate of return	14%

Calculate the payback period for the investment. (Round your answer to two decimal places.)

		2.55 years
		2.77 years
		2.75 years
		2.82 years