ITPEC IP April 2026 Question 100
Company A is investigating the investment of 10 million yen in the rebuilding of a sales support system. When the current operation costs for the system are 5 million yen per year, the operation costs for the system after the rebuilding are 4 million per year, and new profit from the reconstruction is 2 million yen per year, how many years is the payback period for investment? Here, no other effects or costs are considered, and the result of calculation is rounded off to one (1) decimal place.
Explanation
3.3 years — divide the investment by the yearly benefit, which is the cost saving plus the new profit.
- •Operating cost saving: 5 − 4 = 1 million yen per year
- •New profit: 2 million yen per year
- •Annual benefit: 1 + 2 = 3 million yen per year
- •Payback period: 10 ÷ 3 = 3.33…, rounded to one decimal place: 3.3 years
Answer (b)
Why not others:
- •(a) 2.5 — equals 10 ÷ 4, dividing by the new operating cost of 4 million, which is a cost the company still pays, not a benefit
- •(c) 5.0 — 10 ÷ 2 counts only the new profit and ignores the 1 million saved on operating costs
- •(d) 10.0 — 10 ÷ 1 counts only the operating cost saving and ignores the new profit
Key rule: The payback period is the investment divided by the yearly increase in cash, and that increase includes both cost savings and new revenue or profit.
System Planning · AI-written, may contain errors
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