An engineer is establishing his own small company. He investment of P500,000 which he will recover in 15 years. It is estimated that his annual revenue will be P900,000 per year and his annual cost is P750 000. If the he expects to earn at least 20% of his capital, should he invest? Note: Use Rate of Return Method and Annual Worth Method.

An engineer is establishing his own small company. He investment of P500,000 which he will recover in 15 years. It is estimated that his annual revenue will be P900,000 per year and his annual cost is P750 000. If the he expects to earn at least 20% of his capital, should he invest? Note: Use Rate of Return Method and Annual Worth Method.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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