Question
Olinick Corporation is considering a project that would require an Investment of $324,000 and would last for 8 years. The Incremental annual revenues and
Olinick Corporation is considering a project that would require an Investment of $324,000 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 Variable expenses Contribution margin Fixed expenses: Salaries Rents Depreciation Total fixed expenses Net operating income $ 200,000 27,000 173,000 34,000 47,000 42,000 123,000 $ 50,000 The scrap value of the project's assets at the end of the project would be $24,000. 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 3.5 years 6.5 years 5.0 years 3.1 years
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