Determine the discounted-payback period

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Reference no: EM131314326

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You are given the following financial data about a new system to be implemented at a company:

Investment cost at n = 0: $23,000

Investment cost at n = 1: $18,000

Useful life: 10 years

Salvage value (at the end of 11 years): $7,000

Annual revenues: $19,000 per year

Annual expenses: $6,000 per year

MARR:10%

Note: The first revenues and expenses will occur at the end of year 2.

(a) Determine the conventional-payback period.

(b) Determine the discounted-payback period.

Reference no: EM131314326

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