onstruction company budgeted P250,000 per year to pay for the cost of maintenance and repair of their equipment over the next 5 years. If the company expects to spend a total of P300,000 in year 1, how much of a uniform (arithmetic) decrease in the cost of their maintenance and repairs each year should the company do so that they won't go over their allocated budget. Assume that the construction company uses an interest rate of 12.5% per year.

onstruction company budgeted P250,000 per year to pay for the cost of maintenance and repair of their equipment over the next 5 years. If the company expects to spend a total of P300,000 in year 1, how much of a uniform (arithmetic) decrease in the cost of their maintenance and repairs each year should the company do so that they won't go over their allocated budget. Assume that the construction company uses an interest rate of 12.5% per year.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 30P

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