A man is considering P500,000 to open a semi-automatic auto washing business in a city of 400,000 population. The equipment can wash on the average of 12 cars per hour., using two men to operate it and to do small amount of hand work. The man plans to hire two men, in addition to himself and operate the station on an 8-hour basis, 6 days/week, 50weeks/year. He will pay his employees P25 per hour. He expects to charge P25.00 for a car wah out of pocket miscellaneous cost would be P8500/month. He would pay his employees for 2 weeks for vacation each year. Because of the length of his lease, he must write off his investment with 5 years. His capital now is earning 15% and he is employed at a steady job that pays P25,000/month. he desires a rate of return of at least 20% on his investment. Would you recommend the investment? Use the 1 MOn
A man is considering P500,000 to open a semi-automatic auto washing business in a city of 400,000 population. The equipment can wash on the average of 12 cars per hour., using two men to operate it and to do small amount of hand work. The man plans to hire two men, in addition to himself and operate the station on an 8-hour basis, 6 days/week, 50weeks/year. He will pay his employees P25 per hour. He expects to charge P25.00 for a car wah out of pocket miscellaneous cost would be P8500/month. He would pay his employees for 2 weeks for vacation each year. Because of the length of his lease, he must write off his investment with 5 years. His capital now is earning 15% and he is employed at a steady job that pays P25,000/month. he desires a rate of return of at least 20% on his investment. Would you recommend the investment? Use the 1 MOn
Solid Waste Engineering
3rd Edition
ISBN:9781305635203
Author:Worrell, William A.
Publisher:Worrell, William A.
Chapter9: Toward Integrated Resources Management—environmental, Political, And Economic Issues
Section: Chapter Questions
Problem 9.9P
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Question
![Direction. Read and understand the given situation. Solve the problem using the given methods of
evaluation.
A man is considering P500,000 to open a semi-automatic auto washing business in a city of 400,000
population. The equipment can wash on the average of 12 cars per hour., using two men to operate it and to
do small amount of hand work. The man plans to hire two men, in addition to himself and operate the station
on an 8-hour basis, 6 days/week, 50weeks/year. He will pay his employees P25 per hour. He expects to charge
P25.00 for a car wah out of pocket miscellaneous cost would be P8500/month. He would pay his employees
for 2 weeks for vacation each year. Because of the length of his lease, he must write off his investment with
5 years. His capital now is earning 15% and he is employed at a steady job that pays P25,000/month. he
desires a rate of return of at least 20% on his investment. Would you recommend the investment? Use the
following method (ROR, Annual worth, Present, Future and Payback Period)
Cost = Labor, Vacation Leave, Miscellancous Fee, Depreciation and Owners Salary
Interest = 15%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fda495154-4f31-4ddf-98b2-00be9a7ee885%2Fd1589e00-cb87-4248-9b7e-6cb10fabb7ae%2Fg29zc0h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Direction. Read and understand the given situation. Solve the problem using the given methods of
evaluation.
A man is considering P500,000 to open a semi-automatic auto washing business in a city of 400,000
population. The equipment can wash on the average of 12 cars per hour., using two men to operate it and to
do small amount of hand work. The man plans to hire two men, in addition to himself and operate the station
on an 8-hour basis, 6 days/week, 50weeks/year. He will pay his employees P25 per hour. He expects to charge
P25.00 for a car wah out of pocket miscellaneous cost would be P8500/month. He would pay his employees
for 2 weeks for vacation each year. Because of the length of his lease, he must write off his investment with
5 years. His capital now is earning 15% and he is employed at a steady job that pays P25,000/month. he
desires a rate of return of at least 20% on his investment. Would you recommend the investment? Use the
following method (ROR, Annual worth, Present, Future and Payback Period)
Cost = Labor, Vacation Leave, Miscellancous Fee, Depreciation and Owners Salary
Interest = 15%
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