A project is estimated to cost P110,000, last 8 years and have a P15,000 salvage value. The annual gross income is expected to average P24,000 and annual expenses, excluding depreciation, will total P6,000. If capital is earning 10% before income taxes, determine if this is a desirable investment using A. Present Worth Method : B. Future Worth Method C. Payback Period in years
A project is estimated to cost P110,000, last 8 years and have a P15,000 salvage value. The annual gross income is expected to average P24,000 and annual expenses, excluding depreciation, will total P6,000. If capital is earning 10% before income taxes, determine if this is a desirable investment using A. Present Worth Method : B. Future Worth Method C. Payback Period in years
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 1P: A project has an initial cost of 40,000, expected net cash inflows of 9,000 per year for 7 years,...
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A project is estimated to cost P110,000, last 8 years and have a P15,000 salvage
value. The annual gross income is expected to average P24,000 and annual
expenses, excluding
income taxes, determine if this is a desirable investment using
A. Present Worth Method :
B. Future Worth Method
C. Payback Period in years
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