Quintiles 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 (Assume a tax rate of 25% and that all sales are cash sales and all expenses are paid as incurred): Sales................................. $227,000 Variable expenses......... 52,000 Contribution margin....... 175,000 Fixed expenses: Salaries......................... 27,000 Rents.............................. 41,000 Depreciation................ 42,875 Total fixed expenses..... 110,875 Net operating income.... $ 64,125 The payback period of the project is closest to: Select one: a. 4.28 years b. 5.35 years c. 3.77 years d. 7.13 years e. 4.94 years

Quintiles 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 (Assume a tax rate of 25% and that all sales are cash sales and all expenses are paid as incurred): Sales................................. $227,000 Variable expenses......... 52,000 Contribution margin....... 175,000 Fixed expenses: Salaries......................... 27,000 Rents.............................. 41,000 Depreciation................ 42,875 Total fixed expenses..... 110,875 Net operating income.... $ 64,125 The payback period of the project is closest to: Select one: a. 4.28 years b. 5.35 years c. 3.77 years d. 7.13 years e. 4.94 years

Principles of Accounting Volume 2

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Author:OpenStax

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Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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bartleby, a Learneo, Inc. business

	Sales.................................	$227,000
	Variable expenses.........	52,000
	Contribution margin.......	175,000
	Fixed expenses:
	Salaries.........................	27,000
	Rents..............................	41,000
	Depreciation................	42,875
	Total fixed expenses.....	110,875
	Net operating income....	$ 64,125