Sikes Hardware is adding a new product line that will require an investment of $1,520,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $315,000 the first year, $270,000 the second year, and $215,000 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 + 5 Amount to complete recovery in next year Projected cash inflow in next year 215000 ) = Payba year
Sikes Hardware is adding a new product line that will require an investment of $1,520,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $315,000 the first year, $270,000 the second year, and $215,000 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 + 5 Amount to complete recovery in next year Projected cash inflow in next year 215000 ) = Payba year
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Sikes Hardware is adding a new product line that will require an investment of $1,520,000.
Managers estimate that this investment will have a 10-year life and generate net cash inflows of
$315,000 the first year, $270,000 the second year, and $215,000 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 +(
5
+
Amount to complete
recovery in next year
Projected cash inflow in next year
215000
▶
Payback
years
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