how to solve for this problems,

and can you explain for me why when we will calculate for the Net cash flow we do like this ( net operating income + deprecation )? and rather than deprecation can we add something else ?

Example1:

(Ignore income taxes in this problem.) The management of Helberg Corporation is considering a project that would require an investment of $223,000 and would last for 6 years. The annual net operating income from the project would be $107,000, which includes depreciation of $16,000. The scrap value of the project's assets at the end of the project would be $27,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to:

Example 2:

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 Variable expenses 24,000 Contribution margin 230,000 Fixed expenses: Salaries 27,000 Rents 40,000 Depreciation 35,000 Total fixed expenses 102,000 Net operating income$128,000 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.)

Multiple Choice 1.8 years 2.3 years 2.1 years 1.5 years

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