| Full lesson | Create for a teacher a set of content for giving a lesson, beginning with the lesson plan. Each new block of materials must begin with an H1 heading (other subheaders must be H2, H3, etc). When you describe required pictures, write those descriptions in curly brackets, for example: {A picture of a triangle} |
| Which subject | Business |
| What topic | Payback |
| What length (min) | 30 |
| What age group | Doesn't matter |
| Class size | 20 |
| What curriculum | |
| Include full script | |
| Check previous homework | |
| Ask some students to presents their homework | |
| Add a physical break | |
| Add group activities | |
| Include homework | |
| Show correct answers | |
| Prepare slide templates | |
| Number of slides | 5 |
| Create fill-in cards for students | |
| Create creative backup tasks for unexpected moments |
Payback
Doesn't matter
Business
20 students
This lesson aligns with the national curriculum for financial literacy and business management.
| Step Number | Step Title | Length (minutes) | Details |
|---|---|---|---|
| 1 | Introduction to Payback | 5 | Briefly explain the concept of payback and its relevance. |
| 2 | Discussion and Examples | 10 | Present examples of payback calculations using data. |
| 3 | Activity - Printable Cards | 5 | Distribute printable cards for students to fill in with practice data. |
| 4 | Hands-On Calculation | 5 | Guide students to calculate payback period using their cards. |
| 5 | Collection/Random Checking | 3 | Collect the completed cards or check them randomly for understanding. |
| 6 | Homework Assignment | 2 | Assign homework related to payback calculations without student presentations. |
| 7 | Conclusion and Questions | 5 | Recap the lesson and allow time for any questions or clarifications. |
Assign homework related to the lesson objective without requiring presentations from students.
"Good morning, everyone! Today, we’re going to dive into an important financial concept called the 'payback period.' Can anyone tell me what you think the term 'payback' means in the context of investments?
[Pause for student responses]
"Great guesses! The payback period refers to the time it takes for an investment to generate an amount of income or cash equal to the cost of the investment. It’s a crucial measure because it helps businesses decide whether a project is worth pursuing based on how quickly they can recover their initial costs. Let's explore this further!"
"Now, let’s look at some examples together. On the whiteboard, I have a simple scenario: Imagine a company invests $1,000 in a project that brings in $250 each year.
[Draw the scenario on the whiteboard]
"To calculate the payback period, we would take the initial investment and divide it by the annual return.
So, in this case, it’s $1,000 divided by $250.
[Write the calculation on the board]
"What do you think this gives us?
[Wait for student answers]
"Exactly, it gives us a payback period of 4 years! This means that it will take the company 4 years to get back their original investment.
"Now, let me show you a few more scenarios, and we'll calculate the payback periods together."
"Now it’s time for some hands-on practice! I have prepared some printable cards for you. Each card has a different investment scenario with initial costs and annual cash flows.
[Distribute the cards]
"I want you to fill in the payback period for each scenario. You have 5 minutes to work on this individually. Start now!"
"Alright, time’s up! Now let’s go through a few of your cards together. Can someone read out their scenario and tell us how they calculated their payback period?
[Choose a few students to present]
"Excellent work! Remember, the payback period provides a straightforward way to assess an investment’s viability. The shorter the payback period, the less risk there is involved."
"I would like to collect your cards now, but I’ll also randomly check a few of them to ensure everyone understands the concept. If you could pass your cards to the front, that would be great!"
[Collect cards and review them briefly]
"For homework, I’d like you to find an example of a business investment and calculate the payback period for it. Make sure to write down your calculations and bring your work to the next class. Remember, there's no need for a presentation; just your calculations will do."
"To wrap up, let's recap what we learned today. We discussed the payback period, how to calculate it, and explored its importance in business decision-making. Does anyone have any questions or need clarification on anything we covered today?"
[Allow time for questions]
"Thank you all for your participation! I look forward to seeing your homework, and remember to think critically about investments as we continue our financial literacy journey!"
Define the term "payback period" in your own words.
If a company invests $2,000 in a project and expects to earn $400 each year, calculate the payback period for this investment. Show your calculations.
Why is the payback period considered an important measure for businesses when evaluating investments?
Imagine a scenario where a company invests $5,000 in a new technology that saves them $1,000 each year in operational costs. What is the payback period for this investment? Provide a brief explanation of your calculation.
Discuss one advantage and one disadvantage of using the payback period as a measure for investment evaluation.
Find an example from a news article or business report where a company made an investment decision based on the payback period. Summarize the investment and the outcome.
A local restaurant plans to invest $3,600 in kitchen equipment that will allow them to save $900 per year in food costs. Calculate the payback period.
Create your own investment scenario, including the initial investment and annual returns. Provide the payback period calculation for your scenario.
Why might a company prefer a shorter payback period? Discuss in the context of risk and cash flow.
Reflect on what you learned about the payback period. How might this concept be applied in your personal financial decisions in the future?
| Question | Answer |
|---|---|
| What is the payback period in the context of investments? | |
| How do you calculate the payback period? | |
| If a company invests $2,000 and earns $500 annually, what is the payback period? | |
| Why is the payback period an important measure for businesses? | |
| What would be the payback period for an investment of $1,500 with an annual cash flow of $300? | |
| How might a shorter payback period influence a company's investment decision? | |
| Can you think of a situation where a long payback period might still be acceptable? | |
| How does the concept of risk relate to the payback period? | |
| What factors might affect the annual cash flow in a real investment scenario? | |
| How can businesses use the payback period to compare multiple investment opportunities? |