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David is considering purchasing a new point-of-sale computer system for his restaurant. The computer system will allow servers to process orders more quickly, plus it will easily integrate with his inventory management system. The new computer system will cost David $32,500 to purchase and setup. The expected net cash flow from savings is shown below.
Using the payback method, in what year will David recover his investment?
Do not enter dollar signs or commas in the input boxes.
Use the negative sign for negative values.
Year
Expected Net Cash Flow
Cumulative Net Cash Flows
0
$-32,500
$Answer
1
$5,800
2
$7,700
3
$8,500
4
$8,800
5
$6,600
Year the investment is recovered: Answer
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