Bess Haley owns a food truck and sells Tex-Mex items to-go in a large metropolitan are. Bess has a successful business, but many times, the lines to the truck are long and, because her menu is extensive, customers can take a long time to make their menu item selections after they are close enough to the truck to read her menu board. Bess would like to address this issue by purchasing an electronic sign that would be mounted on her truck so that her customers could see it as they stand in line. The sign will cost $22,000.

Bess knows that she will not save any money by purchasing the sign, but she is convinced that her sales would increase by $14,500 per year if she bought it. Bess's profit margin is 20%. The sign has a five-year life and no salvage value. If she buys it, Bess will use the straight-line depreciation method for depreciating the sign. Complete the form she has developed to help Bess calculate her net annual cash savings, and the payback period she anticipates, if she decides to buy the sign.

Bess's Menu Board Purchase: Cash savings and Payback period.

Purchase Price: $22,000

Sales Increase (Annual): $14,500

Annual Income Increase:

Depreciation:

Net Annual Cash Increase/Savings:

Payback Period (Years):

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