The proposed costs to operate this new facility are as follows:

Expected Monthly Revenue (Membership Fee): $125 per person

Monthly Fixed Costs

Utilities: $590

Health/Wellness Staff: $2,500

Arts/Crafts Staff: $2,000

Supplies: $800

Fitness Equipment Maintenance Contract: $200

Variable Costs

Monthly Lunch Cost: $25

Monthly Breakfast Cost: $15

Based on the information above, once the minimum threshold of participants is reached, the initial investment to establish the center is $317,880. The organization anticipates that it will generate $46,920 of net revenues in the first year, $68,166 in the second year, $93,404 in the third year, $123,287 in the fourth year, and $158,573 in the fifth year.

1. Calculate the payback period to determine how long it will take for the organization to recover its initial investment of establishing the senior multipurpose center.