Cullumber Company is considering a long-term investment project called ZIP. ZIP will require an investment of $127,040. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $80,000, and annual cash outflows would increase by $40,300. Compute the cash payback period. (Round answer to 2 decimal places, e.g. 10.52.) Cash payback period years.

Cullumber Company is considering a long-term investment project called ZIP. ZIP will require an investment of $127,040. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $80,000, and annual cash outflows would increase by $40,300. Compute the cash payback period. (Round answer to 2 decimal places, e.g. 10.52.) Cash payback period years.

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.

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Cullumber Company is considering a long-term investment project called ZIP. ZIP will require an investment of $127,040.
It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $80,000, and annual cash
outflows would increase by $40,300. Compute the cash payback period. (Round answer to 2 decimal places, e.g. 10.52.)
Cash payback period
years.

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