Question

By automating its shop floor, your company expects to save $81,000 annually. If the automation costs $225,000, what is the payback period of the automation?

Answer 1

2.78

Step-by-step explanation:

Calculation for the payback period of the automation

Using this formula

Payback period = Automation cost/ Amount to saved annually

Let plug in the formula

Payback period =$225,000/$81,000

Payback period =2.78

Therefore the payback period of the automation will be 2.78