Gato Company invested in a machine with a useful life of six years and no salvage value. The machine was depreciated using the straight-line method. It was expected to produce annual cash inflow from operations, net of income taxes, of P6,000. The present value of an ordinary annuity of P1 for six periods at 10% is 4.355. The present value of P1 for six periods at 10% is 0.564. Assuming that Gato used a time- adjusted rate of return of 10%, what was the amount of the original investment? Group of answer choices P10,640 P29,510 P22,750 P26,130
Gato Company invested in a machine with a useful life of six years and no salvage value. The machine was depreciated using the straight-line method. It was expected to produce annual cash inflow from operations, net of income taxes, of P6,000. The present value of an ordinary annuity of P1 for six periods at 10% is 4.355. The present value of P1 for six periods at 10% is 0.564. Assuming that Gato used a time- adjusted rate of return of 10%, what was the amount of the original investment? Group of answer choices P10,640 P29,510 P22,750 P26,130
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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60. Gato Company invested in a machine with a useful life of six years and no salvage value. The machine was
Group of answer choices
P10,640
P29,510
P22,750
P26,130
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