The payback period of making an investment in a retail shopping mall is 7 years.
Option A is the correct answer.
<h3>What is a payback period?</h3>A payback period is one of the techniques of capital budgeting that tells about how much time the investment amount got recovered by the company.
Given values:
Cost of investment: $630,000
Yearly cash flows: $90,000
Computation of payback period of the retail investment:
Therefore, when the retail investment of $630,000 made with annual cash flows of $90,000 provides a payback period of 7 years.
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