Food Stop, a fast food restaurant, offers home delivery service. The manager of Food Stop decides to upgrade its existing fleet of delivery vehicles to improve the speed of delivery. The estimated cost of the upgrade is set at $100 ,000. If the finance department of Food Stop agrees to a payback period of five years, the upgraded delivery vehicles need to save the restaurant ________ a year for five years.

Question

Quizplus · Accepted Answer

To calculate the required savings per year, we need to divide the cost of the upgrade by the payback period:

$100,000 / 5 years = $20,000 per year

Therefore, the upgraded delivery vehicles need to save at least $20,000 per year for five years to meet the finance department's payback period requirement. Choice C is the best answer.

Food Stop, a Fast Food Restaurant, Offers Home Delivery Service