Olinick Corporation is considering a project that would require an investment of $289,000 and would last for 8 years. The incremental annual revenuesand expenses generated by the project during those 8 years would be as follows (Ignore income taxes.):SalesVariable expenses$254,00024,000230,000Contribution margin.Fixed expenses:Salaries27,000Rents40,000Depreciation35,000Total fixed expenses102,000$128,000Net operating incomeThe scrap value of the project's assets at the end of the project would be $17,000. The cash inflows occur evenly throughout the year. The payback Aperiod of the project is closest to: (Round your answer to 1 decimal place.)Multiple Choice

Payback period is the period during which the initial investment in the project will be recovered…

Olinick Corporation is considering a project that would require an investment of $289,000 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 $254,000 24,000 Variable expenses Contribution margin Fixed expenses: Salaries. 230,000 27,000 Rents 40,000 Depreciation 35,000 Total fixed expenses 102,000 $128,000 Net operating income. ▸ The scrap value of the project's assets at the end of the project would be $17,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to: (Round your answer to 1 decimal place.)

Olinick Corporation is considering a project that would require an investment of $289,000 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 $254,000 24,000 Variable expenses Contribution margin Fixed expenses: Salaries. 230,000 27,000 Rents 40,000 Depreciation 35,000 Total fixed expenses 102,000 $128,000 Net operating income. ▸ The scrap value of the project's assets at the end of the project would be $17,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to: (Round your answer to 1 decimal place.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 22E

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