Jupiter Systems is planning to develop a new telescope.The initial cost of the project is estimated to be $600,000 with an anticipated recovery of $300,000,till perpetuity.The payback period for this project is _____.
A) 6 months
B) 2 years
C) 4 years
D) 6 years

Question

Quizplus · Accepted Answer

The payback period is the time it takes for the initial investment to be recovered. In this case, the initial investment is $600,000 and the anticipated recovery is $300,000 per year. Therefore, the payback period is 600,000 / 300,000 = 2 years.

Jupiter Systems Is Planning to Develop a New Telescope