Magsaysay Company is evaluating an investment that would have an eight-year life and would require a P300,000 purchase of equipment which has no salvage value. The project has the following additional information: Sales, P500,000; Cash Variable Expenses, P200,000; Fixed cash expenses, P150,000; Depreciation expense, P37,500. If the company's required rate of return is 10%, what is the payback period of the investment? a. 3 years b. 2 years c. 2.5 years d. 2.67 years
Magsaysay Company is evaluating an investment that would have an eight-year life and would require a P300,000 purchase of equipment which has no salvage value. The project has the following additional information: Sales, P500,000; Cash Variable Expenses, P200,000; Fixed cash expenses, P150,000; Depreciation expense, P37,500. If the company's required rate of return is 10%, what is the payback period of the investment? a. 3 years b. 2 years c. 2.5 years d. 2.67 years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Magsaysay Company is evaluating an investment that would have an eight-year life and would require a P300,000 purchase of equipment which has no salvage value. The project has the following additional information: Sales, P500,000; Cash Variable Expenses, P200,000; Fixed cash expenses, P150,000;
a. 3 years
b. 2 years
c. 2.5 years
d. 2.67 years
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