Jessica is investing in a capital equipment for her printing press.She wants to know how long it will take for her investment to be returned in the form of savings.The new equipment costs $600,000,and the maintenance costs of the new equipment will save her $120,000 per year.The payback period is _____.

Question

Quizplus · Accepted Answer

The payback period is calculated by dividing the initial investment by the annual savings. So, $600,000 / $120,000 = 5 years.

Jessica Is Investing in a Capital Equipment for Her Printing