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Home Q & A Board Other Fields Homework Help Business Accounting
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bernie2981 bernie2981
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8 years ago
Buxton Corporation is evaluating a capital investment project which would require an initial investment of $240,000 to purchase new machinery. The annual revenues and expenses generated specifically by this project each year during the project's nine year life would be:

Sales   $185,000
Variable expenses   $38,000
Contribution margin   $147,000
Fixed expenses:   
Salaries expense   $31,000
Rent expense   $24,000
Depreciation expense   $25,000
Total fixed expenses   $80,000
Operating income   $67,000

The residual value of the machinery at the end of the nine years would be $15,000. The payback period of this potential project in years would be closest to
A) 1.4.
B) 2.6.
C) 3.1.
D) 3.6.
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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nucleinuclei
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8 years ago
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bernie2981 Author
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#2
8 years ago
Wow! Thank you
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