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Oceanview Manufacturing is considering an investment that would require an initial net investment of $660,000. The following revenues/expenses relate exclusively to the investment: Sales $370,000
Oceanview Manufacturing is considering an investment that would require an initial net investment of $660,000. The following revenues/expenses relate exclusively to the investment: Sales $370,000 Variable expenses $20,000 Contribution margin $350,000 Fixed expenses Salaries expense $35,000 Rent expense $20,000 Depreciation expense $40,000 Total fixed expenses $95,000 Operating income $160,000 The investment will have a residual value of $50,000 at the end of its 12 year useful life. What is the payback period for this investment? If they use payback to make the decision and they require a payback of 2 years would they investor reiert the investment? O A. 4.125 years and reject it B. 3.00 years and reject it. C. 6.00 years and invest D. 3.00 years and invest
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