Initial cost = £1440Saving = £120 each yearCalculate the payback time.Payback time = _____ years
Question
Initial cost = £1440Saving = £120 each yearCalculate the payback time.Payback time = _____ years
Solution
To calculate the payback time, you need to divide the initial cost by the amount saved each year.
Step 1: Identify the initial cost and the annual savings. In this case, the initial cost is £1440 and the annual savings is £120.
Step 2: Divide the initial cost by the annual savings.
So, £1440 ÷ £120 = 12 years
Therefore, the payback time is 12 years.
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