Reinvesting in the Business
» Reinvesting in the Business, Volume 3, Issue 3, 2003
When I use the term MAJOR investment in your business, I mean an investment or series of investments where the total purchase price amounts to around 5 percent or more of your annual gross receipts.
If respondent makes MAJOR investments in business equipment AND uses the payback period to assess their viability.
7a. When you make a MAJOR investment in business equipment, what is the maximum number of years it should take for the investment to pay for itself?
| Response | ||||
|---|---|---|---|---|
| 1 | One year or less | 1 | ||
| 2 | Two years | 25 | ||
| 3 | 3 - 4 years | 27 | ||
| 4 | 5 years | 25 | ||
| 5 | More than 5 years | 11 | ||
| 6 | Varies | 6 | ||
| 7 | DK/Refuse | 6 | ||
| Total (%) | 101 | |||
| N | 139 | |||
Notes: Fifty-three (53) percent of small employers who make major investments in business equipment and use the payback period to determine their financial viability require the payback period to be four years or less (Q#7a).
