An equipment was purchased now at P10,000,000.00 prevailing interest rate is 10% per year. Solve the following cases capitalized cost: Solve for case 1 if the projected maintenance cost will total P5,000,000.00 for 10 years. Use 10% as worth of money or interest rate.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 40P
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An equipment was purchased now at P10,000,000.00 prevailing interest rate is 10% per year. Solve the following cases capitalized cost:

  1. Solve for case 1 if the projected maintenance cost will total P5,000,000.00 for 10 years. Use 10% as worth of money or interest rate.
  2. Solve for case 2 if the machine on item 1.1 is to be replaced every end of 10 years at 10% worth of money. Salvage cost is zero.
  3. Solve for case 3 using the above value on case 1 and 2 at 10%
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