Compute projects payback period

Reference no: EM1362878

Your employer, hates the company's current telephone system. By investing $60,000 in a new phone system, he thinks that he can improve revenue through fewer misdirected sales inquiry calls, resulting in higher sales. Through analysis, he has determined that improvement to cash flow for the company will be $18,000 in years one through four. Thus, the time horizon is four years and you will get the benefit at the end of the year.

Your company can get 10% on invested funds (the market rate of return).
Calculate the NPV.
What is the project's payback period?

Reference no: EM1362878

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