### Compute the payback period

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Question - Using payback to make capital investment decisions

Robinson Hardware is adding a new product line that will require an investment of \$1,454,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of \$300,000 the first year, \$270,000 the second year, and \$260,000 each year thereafter for eight years. Compute the payback period?

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