Question

"A clothing retailer plans to automate its payroll processing by using a scanner that identifies which clerks sold which item. Management is excited about this system becaude it can connect directly to the company's existing computer system. The new automated system will save $13,100 a year in labor. The new system will cost $36,000 to build and test prior to operation. Operating cost will be $3,900 per year. The system has 6 years useful life. The expected net salvage value of the system is estimated at $2,600. If the company's interest rate is 12.7%, what would be the discounted payback period for this project? Enter your answer as an integer."

Answer 1