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the management of lanzilotta corporation is considering a project that would require an investment of $213,000 and would last for 6 years. the annual net operating income from the project would be $105,000, which includes depreciation of $28,000. the scrap value of the project's assets at the end of the project would be $25,000. the cash inflows occur evenly throughout the year. the payback period of the project is closest to (ignore income taxes.):

Respuesta :

Payback period of 2.02 years is the correct answer.The payback period of the project is the amount of time it takes to recover the initial investment. The term "payback time" refers to the amount of years needed to recoup the initial monetary outlay.

It is, in other words, the length of time that a machine, facility, or other investment has generated enough net income to pay its investment costs.

To calculate the payback period, we need to divide the initial investment of $213,000 by the annual net operating income of $105,000. This gives us a payback period of 2.02 years. Since the cash inflows occur evenly throughout the year, the payback period for the project is closest to 2 years.

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