SUBJECT: ENGINEERING ECONOMICS NOTES: 2 DECIMAL ONLY MUST BOX THE FINAL ANSWERS SOLUTIONS MUST BE CLEAR AND UNDERSTANDABLE MUST HAVE GIVEN, FORMULA TO BE USED, SOLUTIONS, ANSWER QUESTION: A newly-built business property, containing space for a store and two offices, can be purchased for P1.2 million. A prospective buyer estimates that during the next 10 years he can obtain annual rentals of at least P273,000 from the property and that the annual out-of-pocket disbursements will not exceed P60,000. He believes that he should be able to dispose the property at the end of 10 years at not less than P700,000. Annual taxes and insurance will total 2.5% of the firs cost. What is the Payback Period of the investment if he had to borrow 25% of the required capital, on the basis of 10-year amortization with interest of 18%?
SUBJECT:
NOTES: 2 DECIMAL ONLY
MUST BOX THE FINAL ANSWERS
SOLUTIONS MUST BE CLEAR AND UNDERSTANDABLE
MUST HAVE GIVEN, FORMULA TO BE USED, SOLUTIONS, ANSWER
QUESTION:
A newly-built business property, containing space for a store and two offices, can be purchased for P1.2 million. A prospective buyer estimates that during the next 10 years he can obtain annual rentals of at least P273,000 from the property and that the annual out-of-pocket disbursements will not exceed P60,000. He believes that he should be able to dispose the property at the end of 10 years at not less than P700,000. Annual taxes and insurance will total 2.5% of the firs cost. What is the Payback
Period of the investment if he had to borrow 25% of the required capital, on the basis of 10-year
amortization with interest of 18%?
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