Given the following data of equipment A and B. B A P 50 000 P 150 000 2000 First Cost Salvage Value Annual Maintenance 6000 Economic life 6000 3000 5 15 The MARR is 12%. Use sinking fund depreciation. What is the rate of return for the additional initial investment on equipment B?

Given the following data of equipment A and B. B A P 50 000 P 150 000 2000 First Cost Salvage Value Annual Maintenance 6000 Economic life 6000 3000 5 15 The MARR is 12%. Use sinking fund depreciation. What is the rate of return for the additional initial investment on equipment B?

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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Question

Given the following data of equipment A and B.
A
First Cost
P 50 000 P 150 000
2000
Salvage Value
Annual Maintenance 6000
Economic life
6000
3000
5
15
The MARR is 12%. Use sinking fund depreciation.
What is the rate of return for the additional initial investment on equipment B?

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