An existing machine in a factory has an annual maintenance cost of P40,000. A and more efficient machine will require an investment of P90,000 and is estimate have salvage value of P30,000 at the end of 8 years. Its annual expenses maintenance and upkeep etc. is total of P 22,000. if the company expects to earn 1 on its investment, will it be worthwhile to purchase the new machine using the pres worth Use PW Method
An existing machine in a factory has an annual maintenance cost of P40,000. A and more efficient machine will require an investment of P90,000 and is estimate have salvage value of P30,000 at the end of 8 years. Its annual expenses maintenance and upkeep etc. is total of P 22,000. if the company expects to earn 1 on its investment, will it be worthwhile to purchase the new machine using the pres worth Use PW Method
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:An existing machine in a factory has an annual maintenance cost of P40,000. A new
and more efficient machine will require an investment of P90,000 and is estimated to
have salvage value of P30,000 at the end of 8 years. Its annual expenses for
maintenance and upkeep etc. is total of P 22,000. if the company expects to earn 12%
on its investment, will it be worthwhile to purchase the new machine using the present
worth. Use PW Method
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