Engr. Yakuzo started his own engineering firm to acquire different construction project. There is an investment of Php 400,000.00 required which will recovered in 15 years. The average projected profit will be Php 800,000.00 per year and that several operating expenses will be considered like material expenses of Php 160,000.00 per year, labor expenses of Php 280,000 per year, Overhead expenses of Php 40,000 + 10% of profit per year, and government expenses of Php 60,000 per year. He is willing to give up his regular job paying Php 216,000.00 per year to devote his full time in this engineering firm which will result to decrease in labor expenses by Php 40,000.00 per year, material expenses of Php 28,000.00 per year, and overhead cost of Php 32,000.00 per year. If the engineer expects to have a profit at least 20% of his capital, should he invest? If so, explain analytically why. [ Pls provide graph and diagram if necesarry ]
Engr. Yakuzo started his own engineering firm to acquire different construction project. There is an investment of Php 400,000.00 required which will recovered in 15 years. The average projected profit will be Php 800,000.00 per year and that several operating expenses will be considered like material expenses of Php 160,000.00 per year, labor expenses of Php 280,000 per year, Overhead expenses of Php 40,000 + 10% of profit per year, and government expenses of Php 60,000 per year. He is willing to give up his regular job paying Php 216,000.00 per year to devote his full time in this engineering firm which will result to decrease in labor expenses by Php 40,000.00 per year, material expenses of Php 28,000.00 per year, and overhead cost of Php 32,000.00 per year. If the engineer expects to have a profit at least 20% of his capital, should he invest? If so, explain analytically why. [ Pls provide graph and diagram if necesarry ]
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Engr. Yakuzo started his own engineering firm to acquire different construction project. There is an investment of Php 400,000.00 required which will recovered in 15 years. The average projected profit will be Php 800,000.00 per year and that several operating expenses will be considered like material expenses of Php 160,000.00 per year, labor expenses of Php 280,000 per year, Overhead expenses of Php 40,000 + 10% of profit per year, and government expenses of Php 60,000 per year. He is willing to give up his regular job paying Php 216,000.00 per year to devote his full time in this engineering firm which will result to decrease in labor expenses by Php 40,000.00 per year, material expenses of Php 28,000.00 per year, and overhead cost of Php 32,000.00 per year. If the engineer expects to have a profit at least 20% of his capital, should he invest? If so, explain analytically why.
[ Pls provide graph and diagram if necesarry ]
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