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 Incom e 1 Php 25,00 0 2 Pho 26,00 0 3 Php 29,00 0 4 Php 30,00 0 5 32,00 0 Should the IE Department purchase the machine? WHY? Hint: Compute the present value
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 Incom e 1 Php 25,00 0 2 Pho 26,00 0 3 Php 29,00 0 4 Php 30,00 0 5 32,00 0 Should the IE Department purchase the machine? WHY? Hint: Compute the present value
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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Transcribed Image Text: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
Incom
e
1
Php
25,00
0
2
Pho
26,00
0
3
Php
29,00
0
4
Php
30,00
0
5
32,00
0
Should the IE Department purchase the machine? WHY?
Hint: Compute the present value
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