An Engineering Company is considering investing in a project. The estimated investment cost for this project amounts to Php 3,950,000. The projected maintenance costs and savings amount to Php 235,000 per year and Php 1,400,000 per year, respectively. The resale value of the project after the project's 10-year life is Php 2,350,000.   What is the present worth of the project? Is it a sound investment opportunity?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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An Engineering Company is considering investing in a project. The estimated investment cost for this project amounts to Php 3,950,000. The projected maintenance costs and savings amount to Php 235,000 per year and Php 1,400,000 per year, respectively. The resale value of the project after the project's 10-year life is Php 2,350,000.

 

What is the present worth of the project? Is it a sound investment opportunity? 

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