Purchase Solution

Payback period.

Not what you're looking for?

Ask Custom Question

Investing $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase demand for your products 1.7% in this and in all future rounds. Looking at the Round 0 Inquirer for Andrews, last year's sales were $162,769,074. Assuming similar sales next year, the 1.7% increase in demand will provide $2,767,074 of additional revenue. With the overall contribution margin of 33.6%, after direct costs this revenue will add $929,737 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year's levels. How long will it take to achieve payback on the initial $2,000,000 TQM investment, rounded to the nearest month?

A. 9 months
B. 26 months
C. 18 months
D. TQM investment will not have a significant financial impact

Purchase this Solution
Solution Summary

Solution shows calculation of payback period of the initial $2,000,000 TQM investment.

Solution Preview

Investing $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase demand for your products 1.7% in this and in all future rounds. Looking at the Round 0 Inquirer for Andrews, last year's sales were $162,769,074. Assuming similar sales next year, the ...

Purchase this Solution
Free BrainMass Quizzes
Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

View More Free Quizzes
Related BrainMass Solutions

  • Use of the Payback Period

    The payback period could be used to determine the payback period in various industry groupings.

  • Payback Period Methid and Discounted Payback Method

    12989 Payback Period Methid and Discounted Payback Method What are the differences between the payback period method and the discounted payback method? Which method is better in valuating investments?

  • Disadvantages of Cash Payback Method

    Payback period for project A is $3,000/ $1,000 = 3 years Payback period for project B is $2,000/ $800 = 2.5 years According to the cash payback method, project B is superior (payback period of 2.5 years against a payback period of 3 years for project

  • Payback and Net Present Value Methods for Dino Corporation

    Payback period = Initial investment/Expected return per year Investment A Payback period = 100,000/30,000 = 3.33 years Investment B Payback period = 50,000/25,000 = 2 years Investment C Payback period = 30,000/8,000 = 3.75 years Investment

  • Payback Period

    4 16,000 26,000 =2 + 5000 / 15000 5 30,000 56,000 56000 Payback period= 2.33 years Answer: Payback period Investment A: 4 years Investment B: 2.33 years Based on Payback criteria Investment

  • Dino Corporation

    Payback period = Initial investment/cash flow per year Investment A Payback period = 100,000/30,000 = 3.33 years Investment B Payback period = 50,000/25,000 = 2 years Investment C Payback period = 30,000/8,000 = 3.75 years Investment D

  • Payback period

    Yes the company should accept the project as the payback period of the project is less than the maximum payback period acceptable The expert determines the payback period for the project.

  • Payback period

    3782 Insight into the payback period method in accounting. What is the payback period method in accounting? Payback Period: The payback period is simply the time taken by the project to return the initial investment.

  • This posting addresses the Payback Period Ratio

    the payback period has ended.

  • Payback Period

    What is the project's simple, regular payback? Payback period is the period in which the initial investments of the project is recovered.

View More Related Solutions