Goodman Woodworks has recently purchased a new saw costing $14,000.Because of a revolutionary new cutting blade,the new saw will not cause the veneer to splinter and will make clean cuts.This will save the firm $1,200 each year,which goes in wastage.Calculate the payback period for the $14,000 investment.

Question

Quizplus · Accepted Answer

The payback period is calculated by dividing the initial investment by the annual savings. $14,000 / $1,200 = 11.67 years. However, since 11.67 is not an option, the closest correct choice is 13 years.

Goodman Woodworks Has Recently Purchased a New Saw Costing $14,000