The deep-frying system for the supermarket deli is exactly like the old one except that it uses less electricity--$10 less electricity per day than the old fryer. Assume there are 21 workdays per month when the fryer is in use. Using the formula in the text, what is the payback period for the $1500 investment in the new fryer?
A)A little more than seven months
B)A little less than six years
C)A little over 9.5 years
D)12.5 years
E)none of the above

Question

Quizplus · Accepted Answer

To calculate the payback period, we need to divide the initial cost of the investment by the monthly savings.

Payback period = Initial cost / Monthly savings

In this case, the initial cost is $1500 and the monthly savings is $10 x 21 = $210.

Payback period = $1500 / $210 = 7.14 months.

Therefore, the payback period is a little more than seven months, which is option A.

The Deep-Frying System for the Supermarket Deli Is Exactly Like