Exercise 1 Puge Co. is considering replacing an old press that cost P800,000 six years ago with a new one costing P2,250,000. Shipping and installation would cost an additional P200,000. The old press has a book value of P150,000 and could be sold currently for P50,000. An additional working capital of P60,000 is required to operate the asset. Puge's net initial investment for analyzing the acquisition of the new press assuming a 30% income tax rate would be?
Exercise 1 Puge Co. is considering replacing an old press that cost P800,000 six years ago with a new one costing P2,250,000. Shipping and installation would cost an additional P200,000. The old press has a book value of P150,000 and could be sold currently for P50,000. An additional working capital of P60,000 is required to operate the asset. Puge's net initial investment for analyzing the acquisition of the new press assuming a 30% income tax rate would be?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 14E
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