Question
A small accounting firm is considering the purchase of a computer software package that would greatly reduce the amount of time needed to prepare tax
A small accounting firm is considering the purchase of a computer software package that would greatly reduce the amount of time needed to prepare tax forms. The software costs $2150 and this expense will be incurred immediately. The firm estimates that it will save $550 of cash flow at the end of each year beginning in one year for 6 consecutive years, and also save $1513 in year 7. What is the payback on the computer package?
Because payback is typically defined as an integer (e.g. 3 years and not as 3.74 years), place your answer as an integer.
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