Туре A Туре В First cost P250,000 P350,000 Annual operating cost 30,000 22,000 Annual labor cost 52,000 34,000 Insurance and property taxes 3% 3% Labor/Payroll taxes 4% 4% Estimated life 10 10

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter2: Financial Statements, Cash Flow, And Taxes
Section: Chapter Questions
Problem 14SP
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A manufacturing plant wishes to buy a new equipment so the purchasing department did some research different types of this equipment. In the monthly meeting, the purchasing department presented a report about the two types of equipment that they have found. Pertinent data follows: If the minimum required rate of return is 19%,
Туре А
Type B
First cost
P250,000
P350,000
Annual operating cost
30,000
22,000
Annual labor cost
52,000
34,000
Insurance and property taxes
3%
3%
Labor/Payroll taxes
4%
4%
Estimated life
10
10
Transcribed Image Text:Туре А Type B First cost P250,000 P350,000 Annual operating cost 30,000 22,000 Annual labor cost 52,000 34,000 Insurance and property taxes 3% 3% Labor/Payroll taxes 4% 4% Estimated life 10 10
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