An investment earns P50,000 at the end of the 1st year and decreases by P5,000 every year thereafter. It has also been predetermined that that a fixed annual cost of P5,000 is spent for maintenance and repairs. If the life of the investment is 10 years, determine whether this is a good investment assuming an investment cost of P162,049 and earning 10% per year. Use Internal Rate of Return and External Rate of Return methods.
An investment earns P50,000 at the end of the 1st year and decreases by P5,000 every year thereafter. It has also been predetermined that that a fixed annual cost of P5,000 is spent for maintenance and repairs. If the life of the investment is 10 years, determine whether this is a good investment assuming an investment cost of P162,049 and earning 10% per year. Use Internal Rate of Return and External Rate of Return methods.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 16P
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An investment earns P50,000 at the end of the 1st year and decreases by P5,000 every year thereafter. It has also been predetermined that that a fixed annual cost of P5,000 is spent for maintenance and repairs. If the life of the investment is 10 years, determine whether this is a good investment assuming an investment cost of P162,049 and earning 10% per year. Use
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