cureRex Industries plans to expand its product line. The project requires an initial investment of$285,000 to purchase new equipment. The project is expected to generate the following annualrevenues and expenses each year during its 9-year life:.Sales revenuesVariable costsContribution marginFixed costs:- Salary expense- Rent expenseDepreciation expenseO 4.4 yearsO 4.6 yearsO 8.4 years$31,00039,00030,000O 8.9 yearsO None of the above$170,000(38,000)$132,000Operating incomeThe only non-cash item of income or expense is depreciation expense. The salvage value of theequipment at the end of the 9 years is $15,000. What is the payback period of this project in years?Round to one decimal point.(100,000)$32,000PQ

Annual net cash inflows = Operating income + Depreciation Payback period = Investment/Annual net…

Rex Industries plans to expand its product line. The project requires an initial investment of $285,000 to purchase new equipment. The project is expected to generate the following annual revenues and expenses each year during its 9-year life: . Sales revenues Variable costs Contribution margin Fixed costs: - Salary expense - Rent expense $31,000 39,000 Depreciation expense 30,000 O 4.4 years O 4.6 years O 8.4 years O 8.9 years Operating income The only non-cash item of income or expense is depreciation expense. The salvage value of the equipment at the end of the 9 years is $15,000. What is the payback period of this project in years? Round to one decimal point. $170,000 (38,000) $132,000 O None of the above (100,000) $32,000

Rex Industries plans to expand its product line. The project requires an initial investment of $285,000 to purchase new equipment. The project is expected to generate the following annual revenues and expenses each year during its 9-year life: . Sales revenues Variable costs Contribution margin Fixed costs: - Salary expense - Rent expense $31,000 39,000 Depreciation expense 30,000 O 4.4 years O 4.6 years O 8.4 years O 8.9 years Operating income The only non-cash item of income or expense is depreciation expense. The salvage value of the equipment at the end of the 9 years is $15,000. What is the payback period of this project in years? Round to one decimal point. $170,000 (38,000) $132,000 O None of the above (100,000) $32,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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