An engineering firm from purchased, 12 yearsago, a heavy planner for P50,000 with no salvagevalue. As the life of the planner was 20 years, astraight line depreciation reserve has beenprovided on that basis. Now the firm wishes toreplace the old planner with a new one possessingseveral advantages. It can sell the old planner forP10,000. The new one will cost P100,000. Howmuch new capital will be required to make thepurchase?- a. P60,000- b. P55,000• c. P66,000- d. P57.000

Salvage value is the book value of an asset after all depreciation has been fully expensed. The…

Answered: P10,000. The new one will cost…

P10,000. The new one will cost P100,o00. How much new capital will be required to make the burchase? . a. P60,000 . b. P55,000 . c. P66,000 . d. P57.000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

An engineering firm from purchased, 12 years
ago, a heavy planner for P50,000 with no salvage
value. As the life of the planner was 20 years, a
straight line depreciation reserve has been
provided on that basis. Now the firm wishes to
replace the old planner with a new one possessing
several advantages. It can sell the old planner for
P10,000. The new one will cost P100,000. How
much new capital will be required to make the
purchase?
- a. P60,000
- b. P55,000
• c. P66,000
- d. P57.000

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