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cles for its engineer by buyin

cles for its engineer by buyin

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...
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1. A company is planning to acquire vehicles for its engineer by buying brand new car and then replacing them every 4 years up to a period of 20 years. The old cars have trade-in value of P300,000.00 at the end of 4 years with a replacement cost of P500,000.00. Annual operating costs including depreciation are estimated P50,000.00. The fund is to invested at 8% compounded annually and should have an excess balance of P150,000.00 at the end of 20 years for emergency fund. Determine the amount needed to push through with the project.
Transcribed Image Text:1. A company is planning to acquire vehicles for its engineer by buying brand new car and then replacing them every 4 years up to a period of 20 years. The old cars have trade-in value of P300,000.00 at the end of 4 years with a replacement cost of P500,000.00. Annual operating costs including depreciation are estimated P50,000.00. The fund is to invested at 8% compounded annually and should have an excess balance of P150,000.00 at the end of 20 years for emergency fund. Determine the amount needed to push through with the project.
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