Natal Technologies is developing a superior ultrasound machine for which it is required to invest $800,000.Based on the company's analysis,the product will generate $200,000 from the first year till perpetuity.According to this,the payback period is
A) 10 years.
B) 6 years.
C) 3 months.
D) 4 years.

Question

Quizplus · Accepted Answer

Payback period = Investment/Annual cash inflow
Payback period = $800,000/$200,000 = 4 years.
Therefore, the best choice is D, as the payback period for the investment is 4 years.

Natal Technologies Is Developing a Superior Ultrasound Machine for Which