An expenditure of Php 1,000,000 is made to modify a material-handling system in a small job shop. This modification will result in first-year savings of Php 100,000, a second-year savings of Php 200,000, and a savings of Php 250,000 per year thereafter. How many years must the system last if an 18% return on investment is required? The system is tailor made for this job shop and has no market (salvage) value at any time.
An expenditure of Php 1,000,000 is made to modify a material-handling system in a small job shop. This modification will result in first-year savings of Php 100,000, a second-year savings of Php 200,000, and a savings of Php 250,000 per year thereafter. How many years must the system last if an 18% return on investment is required? The system is tailor made for this job shop and has no market (salvage) value at any time.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An expenditure of Php 1,000,000 is made to modify a material-handling system in
a small job shop. This modification will result in first-year savings of Php 100,000,
a second-year savings of Php 200,000, and a savings of Php 250,000 per year
thereafter. How many years must the system last if an 18%
is required? The system is tailor made for this job shop and has no market (salvage)
value at any time.
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