A company expects to retire an existing machine at the end of 2024 and will replace it with a new machine for the same task at an estimated cost of P60,000. The old machine is expected to be sold for P5,000 when it is replaced. To provide for the replacement, the company intends to deposit the following amounts in an account earning interest at 8% compounded quarterly: P20,000 at the end of 2021 P15,000 at the end of 2022 P10,000 at the end of 2023 What additional amount is needed at the end of 2024 to purchase the new machine? Draw the CFD.
A company expects to retire an existing machine at the end of 2024 and will replace it with a new machine for the same task at an estimated cost of P60,000. The old machine is expected to be sold for P5,000 when it is replaced. To provide for the replacement, the company intends to deposit the following amounts in an account earning interest at 8% compounded quarterly: P20,000 at the end of 2021 P15,000 at the end of 2022 P10,000 at the end of 2023 What additional amount is needed at the end of 2024 to purchase the new machine? Draw the CFD.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
A company expects to retire an existing machine at the end of 2024 and will replace it with a new
machine for the same task at an estimated cost of P60,000. The old machine is expected to be sold
for P5,000 when it is replaced. To provide for the replacement, the company intends to deposit the
following amounts in an account earning interest at 8% compounded quarterly:
P20,000 at the end of 2021
P15,000 at the end of 2022
P10,000 at the end of 2023
What additional amount is needed at the end of 2024 to purchase the new machine? Draw the
CFD.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education