8. Calculate the capitalized cost of a project that has an initial cost of P 3,000,000 and an additional cost of P 1,000,000 at the end of every ten years. The annual operating cost will be P 100,000 at the end of every year for the first four years and P 160,000 thereafter. In addition, there is expected to be a recurring major rework cost of P 300,000 every 13 years. Assume i = 15%. A. P 2,481,539 B. P 1,935,241 C. P 4,281,936 D. P 3,694,182
8. Calculate the capitalized cost of a project that has an initial cost of P 3,000,000 and an additional cost of P 1,000,000 at the end of every ten years. The annual operating cost will be P 100,000 at the end of every year for the first four years and P 160,000 thereafter. In addition, there is expected to be a recurring major rework cost of P 300,000 every 13 years. Assume i = 15%. A. P 2,481,539 B. P 1,935,241 C. P 4,281,936 D. P 3,694,182
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 1P: A project has an initial cost of 40,000, expected net cash inflows of 9,000 per year for 7 years,...
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