Question

You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,100 and will be posted for one year. You expect that it will generate additional revenue of $969 a month. What is the payback period? The payback period is months. (Round to one decimal place.)

Answer 1

The payback period for the real estate sign investment is 5.3 months, calculated by dividing the total cost of $5,100 by the monthly revenue of $969.

Step-by-step explanation:

The payback period is a financial metric used to determine the amount of time it takes for an investment to generate enough revenues to cover the initial cost. In your case, as a real estate agent, you are considering placing a sign that will cost $5,100, and you expect it to generate an additional revenue of $969 a month. To calculate the payback period, you would divide the total cost of the investment by the monthly revenue increase.

$5,100 / $969/month = 5.26 months

Therefore, after rounding to one decimal place, the payback period for your sign would be 5.3 months.