5. Determine the capitalized cost of an expenditure of P 200,000 at time 0, P 25,000 in years 2 through 5, and P 40,000 per year from year 6 onward. Use an interest rate of 12% per year. ANS. P 456,940.26 i= 12% per year

5. Determine the capitalized cost of an expenditure of P 200,000 at time 0, P 25,000 in years 2 through 5, and P 40,000 per year from year 6 onward. Use an interest rate of 12% per year. ANS. P 456,940.26 i= 12% per year

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

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Calculate it manually, not in excel. Show complete solution and formula used. Please don't type the solution. Write it in a piece of paper.

5. Determine the capitalized cost of an expenditure of P 200,000 at time 0, P 25,000
in years 2 through 5, and P 40,000 per year from year 6 onward. Use an interest
rate of 12% per year.
ANS. P 456,940.26
i = 12% per year
1
3
6
7
8
25,000
2 00,000
40,000
P= CC = ?

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