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Part 1: E26-19 Using payback to make captial investment decisions Rapp Hardware is adding a...

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Accounting

Part 1:

E26-19 Using payback to make captial 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. Please list the step-by-step process, thank you!

Part 2:

E26-20 Using ARR to make capital investment decisions Refer to the Rapp Hardware information in Exercise 26-19. Assume the project has no residual value. Compute the ARR for the investment. Round to two places. Please answer this as well. Thank you!

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