Demand for a product is 12,000 units per year. Every time an order is made, the company must pay $15.00 per order. The cost t
1 answer:
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Answer:
1. 3 years
2. 3.375 years
3. The storage facility project
Explanation:
The payback period measures how long it takes for the amount invested in a project to be recouped from cummulative cash flows.
When there are more than 1 project to be chosen from, the project whose payback period is the least should be chosen.
Therefore, the storage facility project should be chosen.
Explanations on how the payback period is calculated can be found in the attached images. Please contact me if you need clarification.
I hope my answer helps you.
