The equipment generated PHP100 million sales in 2021, its first year. It is expected to grow by 5%. The economic life of the equipment is only 6 years. Cash flows-to-sales ratio is 50%. Discount rate is 10%. Ignore taxes and salvage value. 1. How much is the expected total sales over the life of the equipment? 2. How much is the expected total cash inflows over the life of the equipment?

The equipment generated PHP100 million sales in 2021, its first year. It is expected to grow by 5%. The economic life of the equipment is only 6 years. Cash flows-to-sales ratio is 50%. Discount rate is 10%. Ignore taxes and salvage value. 1. How much is the expected total sales over the life of the equipment? 2. How much is the expected total cash inflows over the life of the equipment?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...

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