(Ignore income taxes in this problem. ) Burwinkel Corporation is considering a project that would require an investment of $252,000 and would last for 7 years.The incremental annual revenues and expenses generated by the project during those 7 years would be as follows: The scrap value of the project's assets at the end of the project would be $28,000.The payback period of the project is closest to:

Question

(Ignore income taxes in this problem. ) Burwinkel Corporation is considering a project that would require an investment of $252,000 and would last for 7 years.The incremental annual revenues and expenses generated by the project during those 7 years would be as follows:  The scrap value of the project's assets at the end of the project would be $28,000.The payback period of the project is closest to:

Quizplus · Accepted Answer

The payback period is the investment cost of $252,000 divided by the $197,000 ($165,000 + $32,000) annual cash flow;$252,000 F1F1F1S1F1F1F10 $197,000 = 1.28 years.

(Ignore Income Taxes in This Problem