1. A company is considering two alternatives with regards to anequipment which it needs. The alternatives are as follows:Alternative A: PurchaseCost of equipmentSalvage valueDaily operating costP700,000100,00050010Economic life, yearsAlternative B: Rental at P1,500 per day.At 18% interest, how many days per year must the equipment bein use if Alternative A is to be chosen.Ans. 152 days

Salvage value is the determines the resale value of an asset at the end of its useful life. It is…

1. A company is considering two alternatives with regards to an equipment which it needs. The alternatives are as follows: Alternative A: Purchase P700,000 100,000 Cost of equipment Salvage value Daily operating cost Economic life, years Alternative B: Rental at P1,500 per day. At 18% interest, how many days per year must the equipment be in use if Alternative A is to be chosen. Ans. 152 days 500 10

1. A company is considering two alternatives with regards to an equipment which it needs. The alternatives are as follows: Alternative A: Purchase P700,000 100,000 Cost of equipment Salvage value Daily operating cost Economic life, years Alternative B: Rental at P1,500 per day. At 18% interest, how many days per year must the equipment be in use if Alternative A is to be chosen. Ans. 152 days 500 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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