An engineer launches a project in the country's top techohub. This involves rental of a computer unit for online class students. He felt that because of the density of students in the area, 90% of his 30-units will be occupied per sem (5 months each) per year. He desires a rate of return of 20%. Other pertinent data are the following: Office investment |Computer investment per unit Cost of computers after 10 yrs Office rental per month Computer rental per unit per month Annual maintenance budget per unit Business tax Insurance P 1,000,000 P 35,000 P 5,000 P 9,000 P 2,000 P 5,000 1% of Total Investment 0.5% of Total Investment Assess the project using (1) ROR, (2) Present Worth Method, and (3) Future Worth Method. (4) Estimate the payback period of this project.
An engineer launches a project in the country's top techohub. This involves rental of a computer unit for online class students. He felt that because of the density of students in the area, 90% of his 30-units will be occupied per sem (5 months each) per year. He desires a rate of return of 20%. Other pertinent data are the following: Office investment |Computer investment per unit Cost of computers after 10 yrs Office rental per month Computer rental per unit per month Annual maintenance budget per unit Business tax Insurance P 1,000,000 P 35,000 P 5,000 P 9,000 P 2,000 P 5,000 1% of Total Investment 0.5% of Total Investment Assess the project using (1) ROR, (2) Present Worth Method, and (3) Future Worth Method. (4) Estimate the payback period of this project.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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