ABC Company Is Adding a New Product Line That Will

Multiple Choice

ABC Company is adding a new product line that will require an investment of $1,500,000. The product line is estimated to generate cash inflows of $300,000 the first year, $250,000 the second year, and $200,000 each year thereafter for ten more years. What is the payback period?

A) 2.73 years
B) 6.00 years
C) 6.75 years
D) 7.25 years