JUST need answer asap. (Ignore income taxes in this problem.) The management of

Question

JUST need answer asap. (Ignore income taxes in this problem.) The management of Helberg Corporation is considering a project that would require an investment of $270,000 and would last for 6 years. The annual net operating income from the project would be $112,000, which includes depreciation of $15,000. The scrap value of the project's assets at the end of the project would be $17,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to:

2.1 years

2.4 years

1.9 years

2.1 years

Explanation / Answer

ANSWER = B) 2.4 YEARS

Payback period = Initial investment / Annual cash inflows

= $270,000 /  $112,000

= 2.4 Years

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