FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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It is estimated that insulation of steam pipes in a factory will reduce fuel bill by as much as 20%. The cost of insulation is P9,000 and the cost of taxes and insurance is 5% of the initial cost. Without the insulation, the annual fuel bill is P18,000. If the insulation is worthless after 6 years and a minimum of 12% is desired, would it be worthwhile to invest in the insulation?
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