Olinick Corporation is considering a project that would require an investment of $349,000 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 $220,000 Variable expenses 21,000 Contribution margin 199,000 Fixed expenses: Salaries 39,000 Rents 52,000 47,000 Depreciation Total fixed expenses 138,000 Net operating income $ 61,000 The scrap value of the project's assets at the end of the project would be $29,000. 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 $349,000 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 $220,000 Variable expenses 21,000 Contribution margin 199,000 Fixed expenses: Salaries 39,000 Rents 52,000 47,000 Depreciation Total fixed expenses 138,000 Net operating income $ 61,000 The scrap value of the project's assets at the end of the project would be $29,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to: (Round your answer to 1 decimal place.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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