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kaleb swanner
on Dec 17, 2024

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The management of Lanzilotta Corporation is considering a project that would require an investment of $218,000 and would last for 6 years. The annual net operating income from the project would be $106,000, which includes depreciation of $31,000. The scrap value of the project's assets at the end of the project would be $26,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to (Ignore income taxes.) : (Round your answer to 1 decimal place.)

A) 1.6 years
B) 2.1 years
C) 1.3 years
D) 2.8 years

Payback Period

The time it takes for an investment or project to generate cash flow or profits sufficient to cover the initial outlay or cost.

Scrap Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Net Operating Income

The income generated from a company's everyday business operations, excluding taxes and interest.

  • Master the calculation of the payback period for investment projects and its relevance in investment decisions.
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Esiyah WaheedDec 18, 2024
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