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If a project cost is only $100 up front and its annual benefits are $20/year, what is its payback period in years?

Sagot :

The correct answer of the question is 5 years.

If a project cost is only $100 up front and its annual benefits are $20/year then the payback period in years is 5 years.

What is project cost?

  • Every project that an organization decides to work on generates some expenses. These expenses are of two types.  
  • Direct costs: it includes fixed labor, materials etc.
  • Indirect costs: includes utility etc...
  • The cost of the project is estimated by the project manager.  

What is payback period?

  • It refers to the time that a person/ company would take to return the money of investment.
  • Payback period= cost of investment/ average annual cash flow
  • It helps us in understanding how much time it would take to recover the initial costs.

To learn more about  investment visit: https://brainly.com/question/27847789

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