A printing press machine has a cash equivalent ofP250,000. For the first three years, it will provideP20,000 worth of profit each year. For the nextfour years, annual profit will be P35,000. For thelast two years, expenses will exceed revenues andwill have a loss of P10,000 each year. Calculatethe acceptability of this investment using FWmethod if MARR is 18% per year. What is ERR if ϵ= 15%? Answers: FW=-683, ERR=4.84% kindly show detailed solution
A printing press machine has a cash equivalent ofP250,000. For the first three years, it will provideP20,000 worth of profit each year. For the nextfour years, annual profit will be P35,000. For thelast two years, expenses will exceed revenues andwill have a loss of P10,000 each year. Calculatethe acceptability of this investment using FWmethod if MARR is 18% per year. What is ERR if ϵ= 15%? Answers: FW=-683, ERR=4.84% kindly show detailed solution
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A printing press machine has a cash equivalent of
P250,000. For the first three years, it will provide
P20,000 worth of profit each year. For the next
four years, annual profit will be P35,000. For the
last two years, expenses will exceed revenues and
will have a loss of P10,000 each year. Calculate
the acceptability of this investment using FW
method if MARR is 18% per year. What is ERR if ϵ
= 15%? Answers: FW=-683, ERR=4.84% kindly show detailed solution
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