A semiconductor manufacturing plant is considering retiring an existing machine at the end of 2014. The new machine to replace the existing one will have an estimated cost of Php325,000. The old machine is expected to be sold for Php48,000 when it is replaced. To accumulate the balance of the required capital, the firm will deposit the following sums in an account earning interest at 8% compounded annually: Php55,000 at the end of 2011, Php65,000 at the end of 2012, and Php75,000 at the end of 2013. What additional amount is needed at the end of 2014 to purchase the new machine?
A semiconductor manufacturing plant is considering retiring an existing machine at the end of 2014. The new machine to replace the existing one will have an estimated cost of Php325,000. The old machine is expected to be sold for Php48,000 when it is replaced. To accumulate the balance of the required capital, the firm will deposit the following sums in an account earning interest at 8% compounded annually: Php55,000 at the end of 2011, Php65,000 at the end of 2012, and Php75,000 at the end of 2013. What additional amount is needed at the end of 2014 to purchase the new machine?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 6E
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A semiconductor manufacturing plant is considering retiring an existing machine at the end of 2014. The new machine to replace the existing one will have an estimated cost of Php325,000. The old machine is expected to be sold for Php48,000 when it is replaced. To accumulate the balance of the required capital, the firm will deposit the following sums in an account earning interest at 8% compounded annually: Php55,000 at the end of 2011, Php65,000 at the end of 2012, and Php75,000 at the end of 2013. What additional amount is needed at the end of 2014 to purchase the new machine?
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