The Pizza Place is considering investing $80 000 in a new pizza oven.If it is estimated that,as a result of the investment,net cash inflow will increase by $21 000 pa.for 6 years,the payback period for the oven is:

Question

Quizplus · Accepted Answer

To calculate the payback period, we need to divide the initial investment by the net cash inflow per year.

Payback period = Initial investment / Net cash inflow per year

Payback period = $80,000 / $21,000 per year

Payback period = 3.8 years

Therefore, the best choice is B) 3.8 years as it has the shortest payback period.

The Pizza Place Is Considering Investing $80 000 in a New