Czaplinski Corporation is considering a project that would require an investment of $323,000 and would last for 7 years. The incremental annual revenues and expenses generated by the project during those 7 years would be as follows: Sales.......... Variable expenses.............. Contribution margin. Fixed expenses: Salaries. Rents....... ******** Depreciation. Total fixed expenses........... Net operating income........ $114,000 15,000 99,000 14,000 11,000 43,000 68,000 $.31,000 I The scrap value of the project's assets at the end of the project would be $22,000. The payback period of the project is closest to:

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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10. Czaplinski Corporation is considering a project that would require an investment of
$323,000 and would last for 7 years. The incremental annual revenues and expenses
generated by the project during those 7 years would be as follows:
Sales.......
Variable expenses
Contribution margin.
Fixed expenses:
Salaries...
Rents..
Depreciation.
Total fixed expenses...
Net operating income.....
$114,000
15,000
99,000
B. 4.4 years
C. 4.1 years
D. 10.4 years
14,000
11,000
43,000
68,000
$.31,000
The scrap value of the project's assets at the end of the project would be $22,000. The
payback period of the project is closest to:
A. 9.7 years
Transcribed Image Text:10. Czaplinski Corporation is considering a project that would require an investment of $323,000 and would last for 7 years. The incremental annual revenues and expenses generated by the project during those 7 years would be as follows: Sales....... Variable expenses Contribution margin. Fixed expenses: Salaries... Rents.. Depreciation. Total fixed expenses... Net operating income..... $114,000 15,000 99,000 B. 4.4 years C. 4.1 years D. 10.4 years 14,000 11,000 43,000 68,000 $.31,000 The scrap value of the project's assets at the end of the project would be $22,000. The payback period of the project is closest to: A. 9.7 years
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