. Calculate the annual and present worth of the project.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 27P
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Question
![Consider the cashflow (n = 10 years, MARR = e = 14%)
Cash Flow A
Investment
P 180,000
Revenues
P 350,000 per year
Expenses
P 400,000 per year
for the first 3 years,
decreasing by P
50,000 per year
thereafter
a. Calculate the annual and present worth of the project.
Salvage
Value
P 40,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fef74f9f9-20a6-4755-be9d-3ef9b312f7ea%2F21012ae4-0305-464a-88d1-8ea8c660366e%2F287e57_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the cashflow (n = 10 years, MARR = e = 14%)
Cash Flow A
Investment
P 180,000
Revenues
P 350,000 per year
Expenses
P 400,000 per year
for the first 3 years,
decreasing by P
50,000 per year
thereafter
a. Calculate the annual and present worth of the project.
Salvage
Value
P 40,000
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Step 1 Introduction - for your reference purpose
VIEWStep 2 Pv factor table @ ( 14% , 10years) - for your reference purpose
VIEWStep 3 Calculation of Present value (PV) of Net annual cash flows
VIEWStep 4 Calculation of Present woth
VIEWStep 5 Calculation of Annual worth (By using formula method)
VIEWStep 6 Calculation of Annual worth (By using PV table) - simple method for step 5
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