(Ignore income taxes) Ostermeyer Corporation is considering a project that would require an initial investment of $247,000 and would last for 7 years.
The incremental annual revenues and expenses for each of the 7 years would be as follows:
Required: Determine the payback period of the project. Show your work!
		Sales		$1,98,000
		Variable expenses		46,000
		Contribution margin		1,52,000
		Fixed expenses:
		Salaries	$ 22,000
		Rents	32,000
		Depreciation	33,000
		Total fixed expenses		87,000
		Net operating income		$ 65,000