The Management of Lanzilotta Corporation Is Considering a Project That

question 318

Multiple Choice

The management of Lanzilotta Corporation is considering a project that would require an investment of $263,000 and would last for 8 years. The annual net operating income from the project would be $66,000, which includes depreciation of $31,000. The scrap value of the project's assets at the end of the project would be $15,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to (Ignore income taxes.) :

• A) 3.8 years
• B) 2.6 years
• C) 2.7 years
• D) 4.0 years

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