Answer :
Payback duration is the time required for annual financial savings to get better the preliminary funding in a project.
The required details for payback period in given paragraph
Here, the financial savings are uniform, so we are able to use the subsequent system for payback duration:
Payback duration = Net preliminary funding / Annual financial savings
Given: Initial funding = $19000, Annual financial savings = $900
So, Payback duration = $19000 / $900 = 21.1 years
Payback duration is regularly used as an evaluation device as it is simple to use and smooth to apprehend for maximum individuals, no matter educational education or area of endeavor. When used cautiously or to evaluate comparable investments, it could be pretty useful. As a stand-by myself device to evaluate an funding to "doing nothing," payback duration has no specific standards for decision-making (except, perhaps, that the payback duration need to be much less than infinity).
The payback duration is taken into consideration a way of evaluation with extreme boundaries and qualifications for its use, as it does now no longer account for the time cost of cash, risk, financing, or different crucial considerations, inclusive of the possibility price.
To know about payback period click here
https://brainly.com/question/23149718
#SPJ4
To calculate the payback period for installing a solar panel system with an upfront cost of $19,000 and annual savings of $900, divide the upfront cost by the annual savings to get approximately 21.11 years.
Installing a solar panel system comes with a total upfront cost of $19,000 after all tax credits. If the solar panels reduce your utility bill by $900 per year, the payback period can be calculated by dividing the upfront cost by the annual savings.
To determine the payback period: $19,000 / $900 = 21.11 years. Therefore, the payback period of installing the solar panel system would be approximately 21.11 years.
