You want to get approval for a capital expense to bring the copy service back in house. An investment of $24,000.00 for a dedicated computer and a new copy machine will support the ROI staff you already have. You estimate that it will bring in a cash income of $40,000.00 over the next 5 years. Your facility uses straightline depreciation to calculate the average net income.
1. Use Table 632 to figure the rate of return on the NPV and Table 633 to determine the number of years it will take for the payback.
2. Then, use this formula to calculate the paybak period= INITIAL OUTLAY (investment)/Average Net Income=Payback Period
3. How many years will it take to pay back the investment?
Table 632: Net Present Value at 10.0%
Net Present Value at 10.0% 

Years 
Net Cash Flow 
Factor for NPV at 10.0% 
Present Value of Cash Flow 
1 
$2,000 
$0.909091 

2 
$5,000 
$0.826446 

3 
$9,000 
$0.751315 

4 
$11,000 
$0.683013 

5 
$13,000 
$0.620921 
Table 633: Payback Method of Evaluating the Capital Expense for the InHouse Copy Service
Payback Method of Evaluating the Capital Expense for the InHouse Copy Service 

Year 
Average Net Income 
Initial Investment 
Remaining 
0 
$24,000 

1 

2 

3 

4 

5 

6 

Total 