AN INVESTMENT OF P270,000.00 ON COMPUTER SHOP WILL HAVE THE FOLLOWING DATA: UNIFORM ANNUAL REVENUE-P185,000.00 FOR 5 YEARS OPERATION AND MAINTENANCE-P85,000.00/YEAR TAXES/INSURANCE-5% OF THE FIRST COST SALVAGE VALUE OF THE COMPUTERS AFTER 5 YEARS-10% OF INVESTMENT EXPECTED EARNINGS ON CAPITAL- 25% PROVE THAT THIS INVESTMENT IS JUSTIFIABLE OR NOT BY USING ROR METHOD PLEASE GIVE FULL AND DETAILED SOLUTION

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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AN INVESTMENT OF P270,000.00 ON COMPUTER SHOP WILL HAVE THE FOLLOWING DATA:

  • UNIFORM ANNUAL REVENUE-P185,000.00 FOR 5 YEARS
  • OPERATION AND MAINTENANCE-P85,000.00/YEAR
  • TAXES/INSURANCE-5% OF THE FIRST COST
  • SALVAGE VALUE OF THE COMPUTERS AFTER 5 YEARS-10% OF INVESTMENT
  • EXPECTED EARNINGS ON CAPITAL- 25%

PROVE THAT THIS INVESTMENT IS JUSTIFIABLE OR NOT BY USING ROR METHOD

PLEASE GIVE FULL AND DETAILED SOLUTION

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