Foodie,a fast-food joint,offers home delivery service.The manager realizes that the purchase of a few motorcycles would make their service more efficient.The estimated cost of purchase is set at $100,000 and it is expected to save $20,000 per year.In this case,the payback period would be _____ years.

Question

Quizplus · Accepted Answer

If the motorcycles cost $100,000 and is expected to save the outlet $20,000 per year, the payback period is five years ($100,000/$20,000 per year). A payback period is the length of time it will take for the benefits generated by an investment (such as cost savings from machinery) to offset the cost of the investment.

Foodie,a Fast-Food Joint,offers Home Delivery Service