A wastewater treatment facility is planning to purchase a new sludge dryer equipment to replace its present unit. The new sludge dryer would cost P135,402 with a five (5) year-life, and no estimated salvage value. Its operating cost would be P150.064 a year. The sludge dryer that they are currently using at present has a book value of P75,260 and a remaining life of 5 years. It has also no estimated salvage value. And its variable operating cost would be cost P187.568 a year. Money is worth 10%. Using ROR method, which is profitable, to buy the new sludge dryer or retain the old equipment? (express your answer in percentage)
A wastewater treatment facility is planning to purchase a new sludge dryer equipment to replace its present unit. The new sludge dryer would cost P135,402 with a five (5) year-life, and no estimated salvage value. Its operating cost would be P150.064 a year. The sludge dryer that they are currently using at present has a book value of P75,260 and a remaining life of 5 years. It has also no estimated salvage value. And its variable operating cost would be cost P187.568 a year. Money is worth 10%. Using ROR method, which is profitable, to buy the new sludge dryer or retain the old equipment? (express your answer in percentage)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A wastewater treatment facility is planning to purchase a new sludge dryer equipment to
replace its present unit. The new sludge dryer would cost P135,402 with a five (5) year-life,
and no estimated salvage value. Its operating cost would be P150,064 a year.
The sludge dryer that they are currently using at present has a book value of P75,260 and a
remaining life of 5 years. It has also no estimated salvage value. And its variable operating
cost would be cost P187.568 a year. Money is worth 10%. Using ROR method, which is
profitable, to buy the new sludge dryer or retain the old equipment? (express your answer in
percentage)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F999d1f0b-29b5-46a5-8574-df0da52afd16%2Fdb3286eb-d156-49b3-a191-46f542dac2cf%2Fbjplvg6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A wastewater treatment facility is planning to purchase a new sludge dryer equipment to
replace its present unit. The new sludge dryer would cost P135,402 with a five (5) year-life,
and no estimated salvage value. Its operating cost would be P150,064 a year.
The sludge dryer that they are currently using at present has a book value of P75,260 and a
remaining life of 5 years. It has also no estimated salvage value. And its variable operating
cost would be cost P187.568 a year. Money is worth 10%. Using ROR method, which is
profitable, to buy the new sludge dryer or retain the old equipment? (express your answer in
percentage)
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