How to compute the arr for the investment

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Question 1: Using payback to make capital investment decisions. Rapp Hardware is adding a new product line that will require an investment of $1,418,000. 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 $250,000 each year thereafter for eight years. Compute the payback period. Round to one decimal place.

Question 2: Refer to the Rapp Hardware information Assume the project has no residual value. Compute the ARR for the investment. Round to two places.

Reference no: EM132577179

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