volume_mute
A company is evaluating two projects. Project A has an initial investment of 200,000 USD and is expected to return 50,000 USD per year for 6 years. Project B has an initial investment of 150,000 USD and returns 45,000 USD per year for 4 years. Using the Payback Period method, which project should the BA recommend if the organization prioritizes the fastest capital recovery?
publish date: 1969/12/31 00:00:00 UTC
volume_mute
Correct Answer
Project B
Explanation
Project B recovers its investment in 3.33 \(\frac{150,000}{45,000}\), while Project takes 4 years \(\frac{200,000}{50,000}\).
Reference
go-math-science.com