A.)Annual cost of Offer AB.)Annual cost of Offer B.C.)Most economical offer (Justify your solution )Please provide detailed solution not in excel, I'm in rush I will vote it up for your effort ) For its proposed expansion, a company is selecting from three offers of equipmentthat will help boost the production. The data on the offers are as follows:First CostSalvage ValueAnnual Operating CostAnnual Maintenance CostEstimated LifeInterest rateOFFER AP1,096,879P24,664P13,892P15,4041818.254%OFFER BP1,875,841P214,085P2,902P1,8071810.355%Using the Annual Cost Analysis, determine the following:OFFER CP1,354,887P188,305P10,311P15,3131813.857%

Equivalent annual cost is which is equivalent to all cost that are going to have impact on equipment…

irst Cost alvage Value Annual Operating Cost Annual Maintenance Cost Estimated Life nterest rate OFFER A P1,096,879 P24,664 P13,892 P15,404 18 18.254% OFFER B P1,875,841 P214,085 P2,902 P1,807 18 10.355% OFFER P1,354,8 P188,30 P10,31: P15,313 18 13.857%

irst Cost alvage Value Annual Operating Cost Annual Maintenance Cost Estimated Life nterest rate OFFER A P1,096,879 P24,664 P13,892 P15,404 18 18.254% OFFER B P1,875,841 P214,085 P2,902 P1,807 18 10.355% OFFER P1,354,8 P188,30 P10,31: P15,313 18 13.857%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

100%

A.)Annual cost of Offer A B.)Annual cost of Offer B. C.)Most economical offer (Justify your solution ) Please provide detailed solution not in excel, I'm in rush I will vote it up for your effort )

For its proposed expansion, a company is selecting from three offers of equipment
that will help boost the production. The data on the offers are as follows:
First Cost
Salvage Value
Annual Operating Cost
Annual Maintenance Cost
Estimated Life
Interest rate
OFFER A
P1,096,879
P24,664
P13,892
P15,404
18
18.254%
OFFER B
P1,875,841
P214,085
P2,902
P1,807
18
10.355%
Using the Annual Cost Analysis, determine the following:
OFFER C
P1,354,887
P188,305
P10,311
P15,313
18
13.857%

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