contemplating for replacement against a challenger whose cost is P18,000. The existing equipment can be traded in today at P6,000 and will have a salvage value of P2,000, kept for another 6 years,. The challenger has an annual operating and maintenance costs of P5,500 and its salvage value P3,000 at end of year 6, i = 15%. Determine whether or not the old equipment should be replaced.
contemplating for replacement against a challenger whose cost is P18,000. The existing equipment can be traded in today at P6,000 and will have a salvage value of P2,000, kept for another 6 years,. The challenger has an annual operating and maintenance costs of P5,500 and its salvage value P3,000 at end of year 6, i = 15%. Determine whether or not the old equipment should be replaced.
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 5P
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