The maintenance on a machine is expected to be P155 at the end of the first year and is expected to increase P40 each year for the next 8 years. What sum of money should be set aside now to pay the maintenance. Assume 6% interest. Compute the equivalent annual cost.
The maintenance on a machine is expected to be P155 at the end of the first year and is expected to increase P40 each year for the next 8 years. What sum of money should be set aside now to pay the maintenance. Assume 6% interest. Compute the equivalent annual cost.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 27P
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(Please draw cashflow diagram)
The maintenance on a machine is expected to be P155 at the end of the first year and is expected to increase P40 each year for the next 8 years. What sum of money should be set aside now to pay the maintenance. Assume 6% interest. Compute the equivalent annual cost.
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