Olinick Corporation is considering a project that would require an investment of $343,000 and would last for 8 years. The incremental annual revenues and expenses generated by the project during those 8 years would be as follows (Ignore income taxes.) : Sales $227,000 Variable expenses 52,000 Contribution margin 175,000 Fixed expenses: Salaries 27,000 Rents 41,000 Depreciation 40,000 Total fixed expenses 108,000 Net operating income 67,000 The scrap value of the project's assets at the end of the project would be $23,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to: Multiple Choice a. 3.0 years b. 5.1 years c. 3.2 years d. 4.8 years
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Home » Business » Olinick Corporation is considering a project that would require an investment of $343,000 and would last for 8 years. The incremental annual revenues and expenses generated by the project during those 8 years would be as follows (Ignore income taxes.