you decided to invest in an equipment worth php12,000,000.00 capital WITH THE FOLLOWING DATA: expected revenue -p5.8m/year cost of operation and maintenance- p2.4m/year taxes and insurance- 2% of the first cost/year your expected earnings is 12% minimum. life of your equipment is five years with expected resale value of p1.2m after 5 years.       DETERMINE IF THE ABOVE IS A DESIRABLE INVESTMENT USING:                 A.ROR METHOD   ANNUAL WORTH METHOD

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...
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  1. you decided to invest in an equipment worth php12,000,000.00 capital WITH THE FOLLOWING DATA:
    • expected revenue -p5.8m/year
    • cost of operation and maintenance- p2.4m/year
    • taxes and insurance- 2% of the first cost/year
    • your expected earnings is 12% minimum.
    • life of your equipment is five years with expected resale value of p1.2m after 5 years.

      DETERMINE IF THE ABOVE IS A DESIRABLE INVESTMENT USING:

                A.ROR METHOD

  1.   ANNUAL WORTH METHOD
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