program x costs 35,000 anually but will save company c 40,000 in the first year. how many months will it take the company to recover its costs in program x

Question

options, 1.5, 5.5, 10.5, 12, 14

 

assuming costs and savings are distributed evenly across each month

Answer 1

 

The program costs 35,000 annually ... so it will cost 35,000/12 monthly

 

   The monthly cost is $2916.67  

 

Let "M" = number of months it takes to recover the costs.

 

We can construct the following inequality ... we need to determine the number of months it takes to recover the 35,000 

 

    2916.87M ≥ 35,000

    

    M ≥ 35,000/2916.67

    M ≥ 11.99

 

So the answer is 12 months