CC Company invested in a project which required an investment of P10,000 with a salvage value of P1,000 at the end of its 3 year life. The annual net income after income taxes are as follows: Year 1 P3,000 2 4,800 3 7,200

CC Company invested in a project which required an investment of P10,000 with a salvage value of P1,000 at the end of its 3 year life. The annual net income after income taxes are as follows: Year 1 P3,000 2 4,800 3 7,200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

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CC Company invested in a project which required an investment of P10,000 with a salvage value of P1,000 at the end of its 3 year life. The annual net income after income taxes are as follows:

Year 1	P3,000
2	4,800
3	7,200

What is the payback period?

Group of answer choices

1.897 yrs

1.513 yrs

1.487 yrs

1.385 yrs

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