A recapping plant is planning to acquire a new Diesel generating set to replace its present unit which they run during brownouts. The new set would cost P135,000 with a five (5) year-life, and no estimated salvage value. Variable cost would be P150,000 a year. The present generating set has a book value of P75,000 and a remaining life of 5 years. Its disposal value now is P7,500, but it would be zero after 5 years. Variable operating cost would be P187,500 a year. Money is worth 10%. What is the Rate of return on additional investment in percentage?
A recapping plant is planning to acquire a new Diesel generating set to replace its present unit which they run during brownouts. The new set would cost P135,000 with a five (5) year-life, and no estimated salvage value. Variable cost would be P150,000 a year. The present generating set has a book value of P75,000 and a remaining life of 5 years. Its disposal value now is P7,500, but it would be zero after 5 years. Variable operating cost would be P187,500 a year. Money is worth 10%. What is the Rate of return on additional investment in percentage?
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
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A recapping plant is planning to acquire a new Diesel generating set to replace its present unit which they run during brownouts. The new set would cost P135,000 with a five (5) year-life, and no estimated salvage value. Variable cost would be P150,000 a year. The present generating set has a book value of P75,000 and a remaining life of 5 years. Its disposal value now is P7,500, but it would be zero after 5 years. Variable operating cost would be P187,500 a year. Money is worth 10%. What is the Rate of return on additional investment in percentage?
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