The Longganisa Builders Co. agreed to pay P100,000.00 for a new bulldozer with an expected life of 20 years. After delivery, it was found that the dozer had only 85% of the guaranteed horsepower. If a more efficient machine would increase the earnings of the company by an estimated P12,000.00 annually, what would the company be willing to pay for the more efficient machine? Interest is 12% compounded annually.
The Longganisa Builders Co. agreed to pay P100,000.00 for a new bulldozer with an expected life of 20 years. After delivery, it was found that the dozer had only 85% of the guaranteed horsepower. If a more efficient machine would increase the earnings of the company by an estimated P12,000.00 annually, what would the company be willing to pay for the more efficient machine? Interest is 12% compounded annually.
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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![The Longganisa Builders Co. agreed to pay P100,000.00 for a new bulldozer with an
expected life of 20 years. After delivery, it was found that the dozer had only 85% of
the guaranteed horsepower. If a more efficient machine would increase the earnings
of the company by an estimated P12,000.00 annually, what would the company be
willing to pay for the more efficient machine? Interest is 12% compounded annually.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff764fd13-9450-4c68-a46c-71e0c9fd567d%2Fd749358d-f7f0-4498-b365-31334c9677c7%2Ffw96dx1_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The Longganisa Builders Co. agreed to pay P100,000.00 for a new bulldozer with an
expected life of 20 years. After delivery, it was found that the dozer had only 85% of
the guaranteed horsepower. If a more efficient machine would increase the earnings
of the company by an estimated P12,000.00 annually, what would the company be
willing to pay for the more efficient machine? Interest is 12% compounded annually.
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