E1 A machine be purchased for P 2,500,000. Itwill incur P40,000 in maintenance expensesand can start earning revenues of P125,000per month as soon as it is installed. It can besold at the end of its useful life of 4 years atan estimated price of P160,O00. The cost ofcapital is 15% per annum. The reinvestmentrate is 12 %.Evaluate using Present Worth, Annual Worthand Future Worth Method to determine if it isacceptable (positive value)note: present WORTH not present valuethanks

Cost of Machine = 2,500,000 Maintenance Cost = 40,000/ month Revenue per month = 125,000 i.e. per…

A machine be purchased for P 2,500,000. It will incur P40,000 in maintenance expenses and can start earning revenues of P125,000 per month as soon as it is installed. It can be sold at the end of its useful life of 4 years at an estimated price of P160,000. The cost of capital is 15% per annum. The reinvestment rate is 12 %. Evaluate using Present Worth, Annual Worth and Future Worth Method to determine if it is acceptable (positive value) note: present WORTH not present value thanks

A machine be purchased for P 2,500,000. It will incur P40,000 in maintenance expenses and can start earning revenues of P125,000 per month as soon as it is installed. It can be sold at the end of its useful life of 4 years at an estimated price of P160,000. The cost of capital is 15% per annum. The reinvestment rate is 12 %. Evaluate using Present Worth, Annual Worth and Future Worth Method to determine if it is acceptable (positive value) note: present WORTH not present value thanks

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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