Lily,a restaurant owner,is planning to invest in a multi-purpose ZS-13 baking oven.The oven costs $20,000 and will have a useful life of 10 years.The payback each year is $8,000.Assuming that the money is received evenly across the year,what will be the payback period if she decides to purchase the oven?
A) 1 year and 5 months
B) 3 years and 3 months
C) 2 years and 1 month
D) 2 years and 6 months

Question

Quizplus · Accepted Answer

The payback period is calculated by dividing the initial investment by the annual payback. $20,000 / $8,000 = 2.5 years, which is 2 years and 6 months.

Lily,a Restaurant Owner,is Planning to Invest in a Multi-Purpose ZS-13