The IE Department is considering to buy a printing machine that is expected to be obsolete in 5 years. The machine is worth P100,000. The prevailing interest rate is 15%/year. the estimated annual gross incomes from the use of this machine is as follows: Year 1 Income P 20, 000 P 25, 000 P 35, 000 P 30, 000 P 28, 000 3 4 Should the IE Department purchase the machine?

The IE Department is considering to buy a printing machine that is expected to be obsolete in 5 years. The machine is worth P100,000. The prevailing interest rate is 15%/year. the estimated annual gross incomes from the use of this machine is as follows: Year 1 Income P 20, 000 P 25, 000 P 35, 000 P 30, 000 P 28, 000 3 4 Should the IE Department purchase the machine?

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

5.
The IE Department is considering to buy a printing machine that is expected to be obsolete in
5 years. The machine is worth P100,000. The prevailing interest rate is 15%/year. the
estimated annual gross incomes from the use of this machine is as follows:
Income
P 20, 000
P 25, 000
P 35, 000
P 30, 000
P 28, 000
Year
1
2
4
Should the IE Department purchase the machine?

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