1) A manufacturing company purchased 10 years a milling machine for P60,000. A straight-line depreciation reserve had been provided on the 20-year life of the machine. The owner of the machine shop desires to replace the old milling machine with a modern unit of many advantages costing P100,000. It can sell the old unit for P20,000. How much new capital will be required for the purchase?

1) A manufacturing company purchased 10 years a milling machine for P60,000. A straight-line depreciation reserve had been provided on the 20-year life of the machine. The owner of the machine shop desires to replace the old milling machine with a modern unit of many advantages costing P100,000. It can sell the old unit for P20,000. How much new capital will be required for the purchase?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2E

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