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Your company is considering purchasing an inventory management system that is expected to save $30,000 in savings annually in labor costs. The new system will
Your company is considering purchasing an inventory management system that is expected to save $30,000 in savings annually in labor costs. The new system will cost $50,000. This project is expected to cost $3000 annually in operation costs and $1000 annually in maintenance costs. They expect to use the system for 5 years and at the end of its useful life the expected salvage value is $1000. How long will it take to recover the initial investment using the conventional payback period analysis?
1.92 years
1 year
2.32 years
2.50 years
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