Question: Flash Company wants to purchase a new computer that will allow the company to do in-house printing rather than sub-contract the work out to a printer. The machine will cost $45,000. FLash also believes there will be substantial savings on printing costs over the five-year life of the machine.
Savings are anticipated at:
Year 1 $15,000
Year 2 $20,000
Year 3 $40,000
Calculate the payback period?