An equipment costing P120,000 is expected  with an estimated economic life of 6 years,  salvage value of P10,000, is expected to bring   in net cash inflow of P70,000 in the first year    of operations, P50,000 in the second year,   P30,000 in the third year, P20,000 in the    fourth year, P10,000 in the fifth year and   P5,000 in the sixth year.  Compute the net  present value assuming that the desired rate   of return if 18%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

 An equipment costing P120,000 is expected  with an estimated economic life of 6 years,  salvage value of P10,000, is expected to bring   in net cash inflow of P70,000 in the first year    of operations, P50,000 in the second year,   P30,000 in the third year, P20,000 in the    fourth year, P10,000 in the fifth year and   P5,000 in the sixth year.  Compute the net  present value assuming that the desired rate   of return if 18%.

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Product life cycle
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education