A young millionaire bought a commercial lot in a busy street of Cagayan de Oro. He plans to franchise a business to be constructed on his commercial lot and has three options. Perform present worth analysis with the cost shown below. The rate of return is 10% per year. Mang Inasal 45,000,000 Chowking 35,000,000 7,000,000 3,500,000 Jollibee First cost Annual operating cost (AOC) 9,000,000 Salvage value Service life, years 60,000,000 5,000,000 10,000,000 20 2,000,000 20 20

A young millionaire bought a commercial lot in a busy street of Cagayan de Oro. He plans to franchise a business to be constructed on his commercial lot and has three options. Perform present worth analysis with the cost shown below. The rate of return is 10% per year. Mang Inasal 45,000,000 Chowking 35,000,000 7,000,000 3,500,000 Jollibee First cost Annual operating cost (AOC) 9,000,000 Salvage value Service life, years 60,000,000 5,000,000 10,000,000 20 2,000,000 20 20

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 9E: Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required:...

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