Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 2.2, Problem 1QQ
To determine
The circular flow in the two sector model.
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3. A project capitalized Php 100,000 invested in depreciable assets will earn a uniform, annual income of Php
25,000 in 10 years. The costs for operation and maintenance total Php 10,000 a year, and taxes and insurance
will cost 5% of the first cost each year. If the company expects its capital to earn 13% before income taxes, is
the investment worthwhile? Use a) AW method; (b) PW method; (c) FW method.
Consider Projects A and B. The expected period of service is 15 years, and the interest rate is 10%
Initial Cost
Annual Operating Cost
Annual Repair Costs
Salvage Value
Project A
Php 50,000
Project B
Php 75,000
15,000
10,000
5,000
3,000
5,000
10,000
Which project would you approve of if a project must be selected using
a. Rate of Return on Additional Method
b. Present Worth Method
c. Equivalent Uniform Annual Cost Method
d. Capitalized Cost
Chapter 2 Solutions
Microeconomics
Ch. 2.2 - Prob. 1QQCh. 2.2 - Prob. 2QQCh. 2.2 - Prob. 3QQCh. 2.2 - Prob. 4QQCh. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQ
Ch. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4P
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