Fablab Mindanao purchased a water jet cutter in which their total manufacturing cost is expected to decrease due to an increased productivity as shown on the table below. 2 3 4 | 7 8 Year Cost, PhP 200 195| 190| 185 | 180| 175 | 170 | 165 1000 1 6 a) Draw the Cash Flow Diagram b) Determine the equivalent annual cost at an interest rate of 8% per year

EBK CONTEMPORARY FINANCIAL MANAGEMENT
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ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section10.A: Mutually Exclusive Investments Having Unequal Lives
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Fablab Mindanao purchased a water jet cutter in which their total manufacturing cost is
expected to decrease due to an increased productivity as shown on the table below.
4
190 185 180
7
175 170
Year
2
200| 195
3
6
1
Cost, PhP
1000
165
a) Draw the Cash Flow Diagram
b) Determine the equivalent annual cost at an interest rate of 8% per yeari
Transcribed Image Text:Fablab Mindanao purchased a water jet cutter in which their total manufacturing cost is expected to decrease due to an increased productivity as shown on the table below. 4 190 185 180 7 175 170 Year 2 200| 195 3 6 1 Cost, PhP 1000 165 a) Draw the Cash Flow Diagram b) Determine the equivalent annual cost at an interest rate of 8% per yeari
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