A capital investment of Php 508,000 on a project can produce an annual revenue of Php 383,000 for 5 years. Thereafter will have a salvage value of 7% of the investment. The costs for operation and maintenance will be Php 150,000 per year; taxes and insurance will be 10% of the first cost per year. The company expects the project to earn not less than 25% before income taxes. What is your payback period of the investment?
A capital investment of Php 508,000 on a project can produce an annual revenue of Php 383,000 for 5 years. Thereafter will have a salvage value of 7% of the investment. The costs for operation and maintenance will be Php 150,000 per year; taxes and insurance will be 10% of the first cost per year. The company expects the project to earn not less than 25% before income taxes. What is your payback period of the investment?
when I ask bartelby if what is the answer in this problem, bartelby gave 2 different answers which is equal to 1.86 years and 2.79 years respectively, can I ask if which is more accurate?
link for 1.86 years - https://www.bartleby.com/questions-and-answers/at-6percent-find-the-capitalized-cost-of-a-gas-turbine-whose-first-cost-is-php200000000-and-life-is-/87ec9cf6-4100-4b15-9258-c234544a09bd
link for 2.788 years - https://www.bartleby.com/questions-and-answers/3.-a-capital-investment-of-p508000.00-on-a-project-can-produce-an-annual-revenue-of-p383000.00-for-5/b5414115-342d-4c65-98dc-e43831a8837a
thank you so much, your answer will be a huge help
Step by step
Solved in 2 steps
