Mima Sassa wants to spend PHP 600,000 on a new equipment. The machine's estimated service life is six years, during which time it should produce a net cash flow of Php150,000 yearly. What is the initial investment's rate of return? 17.5% O 22.5% 20% 25%

Mima Sassa wants to spend PHP 600,000 on a new equipment. The machine's estimated service life is six years, during which time it should produce a net cash flow of Php150,000 yearly. What is the initial investment's rate of return? 17.5% O 22.5% 20% 25%

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter12: Capital Investment Decisions

Section: Chapter Questions

Problem 21BEA

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Question

do not use excel. manual computation with formula

Mima Sassa wants to spend PHP 600,000 on a new equipment. The machine's
estimated service life is six years, during which time it should produce a net
cash flow of Php150,000 yearly. What is the initial investment's rate of return?
17.5%
O 22.5%
20%
O 25%

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