Question

Sheridan Specialties just purchased inventory-management computer software at a cost of $2,015,950. Cost savings from the investment over the next six years will produce the following cash flow stream: $201,340, $354,240, $336,600, $552,250, $793,320, and $598,740. What is the payback period on this investment

Answer 1

4.72 years

Step-by-step explanation:

Payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows.

Explanations on how the answer was derived can begin in the attached image.

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