Answer:
2.5
Explanation:
Upfront cost = $1,000,000
Yearly benefits = $400,000
The payback period is the time that a business takes to repay the amount investment. That is, the time it takes to break even.
In this case, since benefits are steady and no further incurred costs are mentioned. The payback period (t) is given by:
[tex]t=\frac{\$1,000,000}{\$400,000} \\t=2.5\ years[/tex]
