Timed Test This test has a time limit of 2 hours You will be notfied when time e
ID: 1161019 • Letter: T
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Timed Test This test has a time limit of 2 hours You will be notfied when time expires, and you may contioue or submit Warnings appear when half the time, 5 minutes, 1 minute, and 30 seconds remain Mutiple Attempts Not allowed. This test can only be taken once F orce Completion This test can be saved and resumed later The timer wil continue to rnun if you leave the test Remaining Time: 1 hour, 59 minutes, 15 seconds. a Question Completion Status: Moving to another question will save this response. Question 3 of Question 3 10 points SaveA Starbucks Inc. plans to have a comer in the F-block at SJW College. The first cost of this proposal is estimated to be AED 500,000, annual expected to be AED 500, the annual revenues (sales) estimated to be AED 600,00 every year. The payback period of the project onp-0.5 approxemetly o np 5 years o Cannot be determined ? Mong to another queston wil save this response Question 3 of 30/2018 DOLLExplanation / Answer
Initial investment= $500,000
Annual operational costs=$ 500,000]
Annual revenue= $600,000
We have to find out the break-even point or the payback period for the amount invested. In other words, we have to find the time period to recover the initial investment.
Year Operational costs Annual revenue Profits
1 500,000 600,000 100,000
2 500,000 600,000 100,000
3 500,000 600,000 100,000
4 500,000 600,000 100,000
5 500,000 600,000 100,000
In five years, the total profit earned by Starbucks is $500,000. The initial investment is $500,000. Hence, Starbucks' payback period is 5 years
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