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Can someone explain to me why this is the case:
You're starting a new business. There is a large up front cost but zero running costs (for the sake of this example). You want to find out what the annual return on your investment will be.
X = Annual return on investment
A = Start up costs
B = Payback period in years
X = (A/B)/B
I am told this is the case but I don't know why. Any help?