o Calculate the capitalized cost of aproject that has an initial cost ofP3,000,000 and an additional investmentcost of P1,000,000 at the end of every 10years. The annual operating cost will beP100,000 at the end of every year for thefirst 4 years and P160,000 thereafter. Inaddition, there is expected to be arecurring major rework cost of P300,000every 13 years. Assume i = 15%.

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project that 3,000,000 an cost of P1,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

o Calculate the capitalized cost of a
project that has an initial cost of
P3,000,000 and an additional investment
cost of P1,000,000 at the end of every 10
years. The annual operating cost will be
P100,000 at the end of every year for the
first 4 years and P160,000 thereafter. In
addition, there is expected to be a
recurring major rework cost of P300,000
every 13 years. Assume i = 15%.

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