A printing press machine has a cash equivalent of P250,000. For the first three years, it will provide P20,000 worth of profit each year. For the next four years, annual profit will be P35,000. For the last two years, expenses will exceed revenues and will have a loss of P10,000 each year. Calculate the acceptability of this investment using FW method if MARR is 18% per year. What is ERR if ϵ=15%?

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A:

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A: NPV is the net current worth of cash flows that are expected to occur in the future.

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A: Payback period is the number of years under which original investment amount can be recovered.

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A:

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Q: Cecil company is considering the of a new machine. The machine cost $227,500 and will generate a…

A: Machine cost (C) = $227500 Cash inflow (A) = $35000

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A:

Q: An investment of $80,000 is expected to generate a net annual income of $27,000 for 5 years. If the…

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.