The management of NUBD Co. is considering the purchase of a new machien costing P400,000 with a salvage value of P50,000. The company's desired rate of return is 10%. In addition to the foregoing information, use the following data in determining the acceptability in this situation: Year 1 2 3. 4 5. "Income from operations P100,000 40,000 20,000 10,000 10,000 Net cash flow P180,000 120,000 100,000 90,000 90,000 ..........*..
The management of NUBD Co. is considering the purchase of a new machien costing P400,000 with a salvage value of P50,000. The company's desired rate of return is 10%. In addition to the foregoing information, use the following data in determining the acceptability in this situation: Year 1 2 3. 4 5. "Income from operations P100,000 40,000 20,000 10,000 10,000 Net cash flow P180,000 120,000 100,000 90,000 90,000 ..........*..
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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What is the average rate of
Transcribed Image Text:The management of NUBD Co. is considering the purchase of a new machien
costing P400,000 with a salvage value of P50,000. The company's desired rate of
return is 10%. In addition to the foregoing information, use the following data in
determining the acceptability in this situation:
Year
1
Income from operations
P100,000
40,000
20,000
10,000
10,000
Net cash flow
P180,000
120,000
100,000
90,000
90,000
4
5
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