Lean Six Sigma Yellow Belt (LSSYB) — Question 5

Training cost is $3,000 and a project required an initial investment of $12,000. If the project yields monthly savings of $1,800 beginning after 3 months, what is the payback period in months (before money costs and taxes)?

Answer options

• A. 4.17
• B. 8.33
• C. 11.33
• D. 28.28

Correct answer: C

Explanation

The payback period is calculated by determining how long it takes to recover the initial investment of $12,000 after accounting for the 3-month delay before savings begin. After 3 months, the project will start generating $1,800 monthly, and it will take approximately 11.33 months to recoup the initial investment, making option C correct. Options A, B, and D do not accurately represent the time required to recover the investment based on the given savings.