ayback period of 17 and a half months. If investors in our example want to see their money back in a year and a half, then this study shows that we will make it with almost two weeks to spare. We know that equipment has continuing expenses associated with it even after it is paid for. For this example, let us assume that the ongoing cost of the equipment is 10 percent of its purchase price per year. For the user terminals, the ongoing expense con- sists of mobile telephones breaking down or being lost under the provider's warranty. For the system equipment, the ongoing expense is regular maintenance. Adding 10 per- cent per year, $2.85 per subscriber month, to the cost side of the equation pushes the breakeven point to 20 months and 11 days. Another cost on the balance sheet is the cost of growth. As subscriber demand in- creases, a wireless service provider typically will add equipment to satisfy that de- mand. This creates more revenue than not serving the demand, but it does mean spending more money to expand the capacity of the system. Since the cost of a wireless telephone system has a large up-front component with continuing expenses after that, we are counting on the revenue stream to catch up with the cost. Investors are counting on having their up-front cost paid back not too long af- ter the system is running. Once the payback period has passed, the revenue stream continues, and the costs, we hope, continue to be significantly less. This leaves the wireless telephone system operating with a profitable revenue stream. It is not enough for a system simply to repay the up-front cost. It has to earn a suf- ficient rate of return; it has to pay interest to its investors. The wireless system pay- back has to be enough to make it a worthwhile investment. The measure of success of a financial investment is its return on investment (ROI), the interest rate it pays. We select a time window, calculate the costs and the revenue, and determine the rate of return the wireless telephone system earns during that time. 