An old machine cost P48,000.00 a year to maintain. What expenditures for a new machine is justified if no maintenance will be acquired for the first 3 years, P12,000.00 per year for the next 7 years, and P48,000 a year thereafter? Assume money to cost 4% compounded annually and no other costs to be considered.
An old machine cost P48,000.00 a year to maintain. What expenditures for a new machine is justified if no maintenance will be acquired for the first 3 years, P12,000.00 per year for the next 7 years, and P48,000 a year thereafter? Assume money to cost 4% compounded annually and no other costs to be considered.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An old machine cost P48,000.00 a year to maintain. What expenditures for a
new machine is justified if no maintenance will be acquired for the first 3 years,
P12,000.00 per year for the next 7 years, and P48,000 a year thereafter?
Assume money to cost 4% compounded annually and no other costs to be
considered.
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