Calculate the capitalized cost of a project with a P3,000,000 beginning cost and an extra P850,000 investment cost at the end of every ten years. For the first five years, the yearly running cost will be P100,000 at the end of each year, rising to P160,000 after that. In addition, a recurring significant rework cost of P300,000 is estimated every 13 years. Assume that i=15%.
Calculate the capitalized cost of a project with a P3,000,000 beginning cost and an extra P850,000 investment cost at the end of every ten years. For the first five years, the yearly running cost will be P100,000 at the end of each year, rising to P160,000 after that. In addition, a recurring significant rework cost of P300,000 is estimated every 13 years. Assume that i=15%.
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 1P
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![Calculate the capitalized cost of a project with a P3,000,000 beginning cost and
an extra P850,000 investment cost at the end of every ten years. For the first
five years, the yearly running cost will be P100,000 at the end of each year, rising
to P160,000 after that. In addition, a recurring significant rework cost of
P300,000 is estimated every 13 years. Assume that i=15%.
P4,281,935
P4,331,654
P4,202,388
P4,252,105](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fabae5ef4-b21e-46e2-8ffb-e6c26d10ef43%2F9e93f864-321d-4ab5-8ca9-2ce2d4e19922%2F6qbsmp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Calculate the capitalized cost of a project with a P3,000,000 beginning cost and
an extra P850,000 investment cost at the end of every ten years. For the first
five years, the yearly running cost will be P100,000 at the end of each year, rising
to P160,000 after that. In addition, a recurring significant rework cost of
P300,000 is estimated every 13 years. Assume that i=15%.
P4,281,935
P4,331,654
P4,202,388
P4,252,105
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![Calculate the capitalized cost of a project with a P3,000,000 beginning cost and
an extra P850,000 investment cost at the end of every ten years. For the first
five years, the yearly running cost will be P100,000 at the end of each year, rising
to P160,000 after that. In addition, a recurring significant rework cost of
P300,000 is estimated every 13 years. Assume that i=15%.
P4,281,935
P4,331,654
P4,202,388
P4,252,105](https://content.bartleby.com/qna-images/question/abae5ef4-b21e-46e2-8ffb-e6c26d10ef43/6318f582-5d36-4d89-9259-a21f238fc3a7/cf81e4k_thumbnail.jpeg)
Transcribed Image Text:Calculate the capitalized cost of a project with a P3,000,000 beginning cost and
an extra P850,000 investment cost at the end of every ten years. For the first
five years, the yearly running cost will be P100,000 at the end of each year, rising
to P160,000 after that. In addition, a recurring significant rework cost of
P300,000 is estimated every 13 years. Assume that i=15%.
P4,281,935
P4,331,654
P4,202,388
P4,252,105
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