What is the payback period for an investment

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Reference no: EM13838563

A gourmet ice cream store has fixed cost expenses (rent, utilities, etc.) of $100,000/year. The ice cream cost $5/liters to produce and sell for $7 per liter. The store sells around 150,000 liters of ice cream per year. If the gourmet ice cream store is going to operate for five (5) years, what is the payback period for an investment of $400,000 in the first year?

a) Payback= 2 years

b) Payback= 0.88 years

c) Payback= 0.42 years

d) Payback= 2.67 years

Reference no: EM13838563

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