A maintenance supervisor learned that installing a type of high-efficiency light bulb in the building can save

Question:

A maintenance supervisor learned that installing a type of high-efficiency light bulb in the building can save the organization $1,000 a year. Replacing the light bulbs with the new ones would cost about $2,500.

a. What is the payback period for this replacement?

b. What is the average rate of return?

c. Do you think is a worthwhile investment? Why or why not?

Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...

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