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A machine has a first cost of PhP 800,000 and a salvage value of PhP 50,000 at the end of its life after 10 years. The annual savings for the use of the machine amounts to PhP 124,900.97. If the annual maintenance cost of the machine is PhP 4,000 and the sinking fund to recover depreciation earns 6% compute the rate of return of investment.

A machine has a first cost of PhP 800,000 and a salvage value of PhP 50,000 at the end of its life after 10 years. The annual savings for the use of the machine amounts to PhP 124,900.97. If the annual maintenance cost of the machine is PhP 4,000 and the sinking fund to recover depreciation earns 6% compute the rate of return of investment.

Essentials Of Investments
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
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A machine has a first cost of PhP 800,000 and a salvage value of PhP 50,000 at the end of its life after 10 years. The annual savings for the use of the machine amounts to PhP 124,900.97. If the annual maintenance cost of the machine is PhP 4,000 and the sinking fund to recover depreciation earns 6% compute the rate of return of investment.
Transcribed Image Text:A machine has a first cost of PhP 800,000 and a salvage value of PhP 50,000 at the end of its life after 10 years. The annual savings for the use of the machine amounts to PhP 124,900.97. If the annual maintenance cost of the machine is PhP 4,000 and the sinking fund to recover depreciation earns 6% compute the rate of return of investment.
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