Czaplinski Corporation is considering a project that would require an investment of $373,000 and would last for 6 years. The incremental annual revenues and expenses generated by the project during those 6 years would be as follows:
|
Sales
|
$125,000
|
|
Variable expenses
|
16,500
|
|
Contribution margin
|
108,500
|
|
Fixed expenses:
|
|
|
Salaries
|
15,500
|
|
Rents
|
12,000
|
|
Depreciation
|
47,000
|
|
Total fixed expenses
|
74,500
|
|
Net operating income
|
$34,000
|
The scrap value of the project's assets at the end of the project would be $24,000.The payback period of the project is closest to:
|
|
5.2 years
|
|
|
10.1 years
|
|
|
11.0 years
|
|
|
4.6 years
|