A Florist Is Buying a Number of Motorcycles to Expand

question 2

Multiple Choice

A florist is buying a number of motorcycles to expand its delivery service. These will cost $87,000, but are expected to increase profits by $3000 per month over the next four years. What is the payback period in this case?

• A) 24 months
• B) 18 months
• C) 12 months
• D) 29 months

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Definitions:

Concentration Ratio

A measure of the market share of the largest firms within an industry, indicating the market's competitive landscape.

Industry Output

The total production output of firms within a specific industry, an indicator of an industry's scale and health.

Celebrity Endorsements

The practice of having celebrities or well-known public figures promote a product, service, or brand.

Efficient Functioning

Optimal performance within an economy or system where resources are allocated in the most effective manner, maximizing output and welfare.