What would be the discounted payback period for project

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Question: A clothing retailer plans to automate its payroll processing by using a scanner that identifies which clerks sold which items. Management is excited about this system because it can connect directly to the company's existing computer systems. The new automated system will likely save $20,000 a year in labor. The new system will cost about $45,000 to build and test prior to operation. Operating costs will be about $5,000 per year. The system has a six-year useful life. The expected net salvage value of the system is estimated at $2,000. If the company's interest rate is 12%, what would be the discounted payback period for this project?

Reference no: EM131956173

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