A firm has two alternatives for the improvement of its current production system. The data are as follows:Machine AMachine BFirst Cost - P6MFirst cost-P8968578Annual operating cost-P250TAnnual operating cost - P294445Service life - 6 yearsService life - 4 yearsSalvage value - P150TSalvage value - P142107Using the Present Value (PV) Method and with the firm's interest rate of 23% cpd. annually, what the PV ofMachine B?

Introduction:- The following formula used to calculate Present value as follows under:- Present…

A firm has two alternatives for the improvement of its current production system. The data are as follows: Machine A First Cost - P6M Annual operating cost - P250T Service life - 4 years Salvage value - P150T Salvage value - P142107 Using the Present Value (PV) Method and with the firm's interest rate of 23% cpd. annually, what the PV o Machine B First cost-P8968578 Annual operating cost - P294445 Service life - 6 years

A firm has two alternatives for the improvement of its current production system. The data are as follows: Machine A First Cost - P6M Annual operating cost - P250T Service life - 4 years Salvage value - P150T Salvage value - P142107 Using the Present Value (PV) Method and with the firm's interest rate of 23% cpd. annually, what the PV o Machine B First cost-P8968578 Annual operating cost - P294445 Service life - 6 years

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A firm has two alternatives for the improvement of its current production system. The data are as follows:
Machine A
Machine B
First Cost - P6M
First cost-P8968578
Annual operating cost-P250T
Annual operating cost - P294445
Service life - 6 years
Service life - 4 years
Salvage value - P150T
Salvage value - P142107
Using the Present Value (PV) Method and with the firm's interest rate of 23% cpd. annually, what the PV of
Machine B?

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