It is the start of the year and St. Tropez Co. plans to replace its old sing-along equipment. These information are available: Old New Equipment cost P70,000 P120,000 Current salvage value 10,000 - Salvage value, end of useful life 2,000 16,000 Annual operating costs 56,000 38,000 Accumulated depreciation 55,300 - Estimated useful life 10 years 10 years The company’s income tax rate is 35% and its cost of capital is 12%. What is the present value of all the relevant cash flows at time zero? Group of answer choices (P110,000) (P54,000) (P124,700) (P120,000)
It is the start of the year and St. Tropez Co. plans to replace its old sing-along equipment. These information are available: Old New Equipment cost P70,000 P120,000 Current salvage value 10,000 - Salvage value, end of useful life 2,000 16,000 Annual operating costs 56,000 38,000 Accumulated depreciation 55,300 - Estimated useful life 10 years 10 years The company’s income tax rate is 35% and its cost of capital is 12%. What is the present value of all the relevant cash flows at time zero? Group of answer choices (P110,000) (P54,000) (P124,700) (P120,000)
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
Related questions
Question
- It is the start of the year and St. Tropez Co. plans to replace its old sing-along equipment. These information are available:
|
|
Old |
New |
|
Equipment cost |
P70,000 |
P120,000 |
|
Current salvage value |
10,000 |
- |
|
Salvage value, end of useful life |
2,000 |
16,000 |
|
Annual operating costs |
56,000 |
38,000 |
|
Accumulated |
55,300 |
- |
|
Estimated useful life |
10 years |
10 years |
The company’s income tax rate is 35% and its cost of capital is 12%. What is the
Group of answer choices
(P110,000)
(P54,000)
(P124,700)
(P120,000)
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