o maintain its newly acquired equipment, the company needs P40,000 every year for the first 5 years and P60,000 for the next 5 years. In addition, an amount of P140,000 would be also be needed at the end of the fifth and the eighth years. At 6%, what is the present worth of these costs?

o maintain its newly acquired equipment, the company needs P40,000 every year for the first 5 years and P60,000 for the next 5 years. In addition, an amount of P140,000 would be also be needed at the end of the fifth and the eighth years. At 6%, what is the present worth of these costs?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter10: Long-lived Tangible And Intangible Assets

Section: Chapter Questions

Problem 8Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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To maintain its newly acquired equipment, the company needs P40,000 every year for the first 5 years and P60,000 for the next 5 years. In addition, an amount of P140,000 would be also be needed at the end of the fifth and the eighth years. At 6%, what is the present worth of these costs?

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