Rank these investments in order of payback period showing the best project first.
$\bullet$Investment A - 4.2 years
$\bullet$Investment B - 2.8 years
$\bullet$Investment C - 3 years
$\bullet$Investment D - 5.1 years

Question

Quizplus · Accepted Answer

The payback period is the time it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment. The shorter the payback period, the better. Therefore, the investments should be ranked from shortest to longest payback period: B (2.8 years), C (3 years), A (4.2 years), D (5.1 years).

Rank These Investments in Order of Payback Period Showing the Best