ENGINEERING ECONOMICS A capital investment of P508,000.00 on a project can produce an annual revenue of P383,000.00 for 5years. Thereafter will have a salvage value of 7% of the investment. The cost of operation and maintenance would be P150,000 per year; taxes and insurance will be 10% of the first cost per year. The company expects the project to earn not less than 25% before income taxes. Is this a desirable investment? What is the payback period of the investment?

ENGINEERING ECONOMICS A capital investment of P508,000.00 on a project can produce an annual revenue of P383,000.00 for 5years. Thereafter will have a salvage value of 7% of the investment. The cost...

ENGINEERING ECONOMICS

A capital investment of P508,000.00 on a project can produce an annual revenue of P383,000.00 for 5years. Thereafter will have a salvage value of 7% of the investment. The cost of operation and maintenance would be P150,000 per year; taxes and insurance will be 10% of the first cost per year. The company expects the project to earn not less than 25% before income taxes. Is this a desirable investment? What is the payback period of the investment?

Jun 09, 2022