) A certain warehouse is worth P1,650,000. The average value of the merchandise in the warehouse is P1,500,000. The annual insurance rate on the warehouse is 1% and the merchandise stored in the warehouse, 0.9%. A proposal for the installation of a fire sprinkler system is being consider. The system will cost P80,000 and will effect a savings of 70% in a both insurance premiums. Monthly maintenance is estimated to be P500 and annual taxes is P4,000 for the sprinkler system. The owners of the warehouse demand that the investment in such equipment be written-off within 10 years. Invested capital can be expected to earn a minimum return of about 17%. Would you advice the installation? (Uses ROR) 2. (20 points) A certain warehouse is worth P1,650,000. The average value of the merchandise in thewarehouse is P1,500,000. The annual insurance rate on the warehouse is 1% and the merchandisestored in the warehouse, 0.9%. A proposal for the installation of a fire sprinkler system is beingconsider. The system will cost P80,000 and will effect a savings of 70% in a both insurance premiums.Monthly maintenance is estimated to be P500 and annual taxes is P4,000 for the sprinkler system. Theowners of the warehouse demand that the investment in such equipment be written-off within 10 years.Invested capital can be expected to earn a minimum return of about 17%. Would you advice theinstallation? (Uses ROR)

Cost of insurance Annually :- Warehouse. = 1% of 1,650,000 = 16500 Merchandise. = 0.9% of…

Answered: A certain warehouse is worth…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

) A certain warehouse is worth P1,650,000. The average value of the merchandise in the warehouse is P1,500,000. The annual insurance rate on the warehouse is 1% and the merchandise stored in the warehouse, 0.9%. A proposal for the installation of a fire sprinkler system is being consider. The system will cost P80,000 and will effect a savings of 70% in a both insurance premiums. Monthly maintenance is estimated to be P500 and annual taxes is P4,000 for the sprinkler system. The owners of the warehouse demand that the investment in such equipment be written-off within 10 years. Invested capital can be expected to earn a minimum return of about 17%. Would you advice the installation? (Uses ROR)

2. (20 points) A certain warehouse is worth P1,650,000. The average value of the merchandise in the
warehouse is P1,500,000. The annual insurance rate on the warehouse is 1% and the merchandise
stored in the warehouse, 0.9%. A proposal for the installation of a fire sprinkler system is being
consider. The system will cost P80,000 and will effect a savings of 70% in a both insurance premiums.
Monthly maintenance is estimated to be P500 and annual taxes is P4,000 for the sprinkler system. The
owners of the warehouse demand that the investment in such equipment be written-off within 10 years.
Invested capital can be expected to earn a minimum return of about 17%. Would you advice the
installation? (Uses ROR)

Expert Solution

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions