PBP

Year 0 1 2
Cost -371000
Savings 50,000 56000
Accumulated Savings 106,000

DPBP

Year 0 1 2
Cost -371000
Savings 50,000 56000
PV of Savings @ MARR 4% $48,076.92 $51,775.15
Accumulated Savings 99,852
 3 4 5 6 7 8

62720 70246.4 78675.968 88117.08416 98691.134259 110534.07037

168,720 238,966 317,642 405,759
At year 6, savings exceed cost
PBP So, payback period = 6 years

3 4 5 6 7 8

62720 70246.4 78675.968 88117.08416 98691.134259 110534.07037

$55,757.85 $60,046.92 $64,665.91 $69,640.21 $74,997.15 $80,766.16
155,610 215,657 280,323 349,963 424,960 505,726
At year 7, savings exceed cost
DPBP So, payback period
ceed cost
= 7 years