A contractor won a bid to repave so many kilometers of a badly damaged concrete road in the south. He is offered a crane-mounted pneumatic breaker which will cost P 1,200,000 with a salvage value of P 150,000 at the end of its estimated life of 15 years. The annual cost of maintenance, taxes, licenses and insurance is 12% of the first cost, regardless of how the equipment is used. The variable cost is P 550 per day. The equipment is capable of breaking 30 sq.m. of 20-centimeter-thick of concrete road per day. Without equipment, two laborers receiving P 50 each per day could break an average of one sq.m. of the same road per day. How many sq.m. of the road per year must the equipment break to make the machine uastmant? A
A contractor won a bid to repave so many kilometers of a badly damaged concrete road in the south. He is offered a crane-mounted pneumatic breaker which will cost P 1,200,000 with a salvage value of P 150,000 at the end of its estimated life of 15 years. The annual cost of maintenance, taxes, licenses and insurance is 12% of the first cost, regardless of how the equipment is used. The variable cost is P 550 per day. The equipment is capable of breaking 30 sq.m. of 20-centimeter-thick of concrete road per day. Without equipment, two laborers receiving P 50 each per day could break an average of one sq.m. of the same road per day. How many sq.m. of the road per year must the equipment break to make the machine uastmant? A
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 7E
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