An administrator wishes to replace a legacy clinical software product as it has become a security risk. The legacy product generates $10,000 in revenue a month. The new software product has an…

At the end of Year 1, the cumulative net position is -$120,000, far from recovering the $180,000 initial investment.

At the end of Year 2, the cumulative net position is -$62,000, still negative and not yet at break-even.

At the end of Year 3, the cumulative net position is -$4,000, still slightly negative and not a positive return on investment.

The new product generates $5,000/month more than the legacy system ($15,000 vs $10,000), totaling $60,000 in additional annual revenue. After Year 1, the cumulative position is -$120,000 ($60,000 gain minus $180,000 initial cost); adding $58,000 net gain per year (revenue minus $2,000 maintenance) yields -$62,000 at Year 2, -$4,000 at Year 3, and +$54,000 at Year 4 - the first year of positive ROI.