A manufacturer of off-road vehicles is considering the purchase of dual axis inclinometers for installation in a new line of tractors. The distributor of the inclinometers is temporary overstocked and is offering them at a 40% discount from the regular cost of Php 3 400. If the purchase gets them now instead of 2 years from now, which is when they will be needed, what is the present worth of the savings per unit? The company would pay the regular price, if the purchased in 2 years. Assume the interest rate is 10% per year. a. Php 940 b. Php 770 c. Php 880 d. Php 820

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Chapter11: Capital Budgeting Decisions
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A manufacturer of off-road vehicles is considering the purchase of dual axis inclinometers for installation in a new line of tractors. The distributor of the inclinometers is temporary overstocked and is offering them at a 40% discount from the regular cost of Php 3 400.  If the purchase gets them now instead of 2 years from now, which is when they will be needed, what is the present worth of the savings per unit? The company would pay the regular price, if the purchased in 2 years. Assume the interest rate is 10% per year.

a. Php 940
b. Php 770
c. Php 880
d. Php 820
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