A florist is buying a number of motorcycles to expand its delivery service. These will cost $87,000, but are expected to increase profits by $3000 per month over the next four years. What is the payback period in this case?

Question

Quizplus · Accepted Answer

The payback period is calculated by dividing the initial investment by the monthly increase in profits. $87,000 / $3,000 per month = 29 months.

A Florist Is Buying a Number of Motorcycles to Expand