What Is the Payback Period for a $20,000 Project That

question 87

Multiple Choice

What is the payback period for a $20,000 project that is expected to return $6,000 for the first two years and $3,000 for Years 3 through 5?

• A) 3 1/2
• B) 4 1/2
• C) 4 2/3
• D) 5

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Definitions:

Raw Materials Purchased

The total cost of raw materials bought by a company for the purpose of production in a specific period.

Cost Of Goods Manufactured

The total expense incurred to produce products during a specific period, including costs of raw materials, labor, and manufacturing overhead.

Cost Of Goods Sold

The total cost directly linked to the production or acquisition of the goods sold by a company.

Raw Materials Inventory

This represents the total cost of all materials that are not yet processed and used in the production of goods.