(Show the cashflow diagram if needed) A project requires an investment of P400,000, lasts 15 years, and is estimated that the sales will be P800,000 per year. The operating expenses are as follows: Materials: P160,000 per year Labor: P280,000 per year Overhead: P40,000 per year + 10% of sales of year Selling expense: P60,000 per year If it is expected to earn at least 20% of the capital, is the investment desirable? Using ROR
(Show the cashflow diagram if needed) A project requires an investment of P400,000, lasts 15 years, and is estimated that the sales will be P800,000 per year. The operating expenses are as follows: Materials: P160,000 per year Labor: P280,000 per year Overhead: P40,000 per year + 10% of sales of year Selling expense: P60,000 per year If it is expected to earn at least 20% of the capital, is the investment desirable? Using ROR
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
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(Show the cashflow diagram if needed)
A project requires an investment of P400,000, lasts 15 years, and is estimated that the sales will be P800,000 per year. The operating expenses are as follows:
-
- Materials: P160,000 per year
- Labor: P280,000 per year
- Overhead: P40,000 per year + 10% of sales of year
- Selling expense: P60,000 per year
If it is expected to earn at least 20% of the capital, is the investment desirable? Using ROR and AWM
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