Solution-Determine the payback period of the project

Determine the payback period of the project

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Reference no: EM133002749

Problem - Limon Corporation is considering a project that would require an initial investment of $580,000 and would last for 8 years. The incremental annual revenues and expenses for each of the years would be as follows:

Sales $225,000

Variable Costs $64,000

Contribution Margin $161,000

Fixed Expenses Salaries $30,000

Rents $25,000

Depreciation $45,000

Total Fixed Expenses $100,000

Net Operating Income $61,000

At the end of the project, the salvage value of the project's assets would be $12,000.

Required - Determine the payback period of the project.

Reference no: EM133002749

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Determine the payback period of the project

Reference no: EM133002749

Reference no: EM133002749

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