Para Co. is reviewing the following data relating to an energy saving investment proposal: Cost P50,000 (nondepreciable) Residual value at the end of 5 years 10,000 Present value of an annuity of 1 at...


Para Co. is reviewing the following data relating to an energy saving investment proposal:



  • Cost P50,000 (nondepreciable)

  • Residual value at the end of 5 years 10,000

  • Present value of an annuity of 1 at 12% for 5 years 3.60

  • Present value of 1 due in 5 years at 12% 0.57


27. What would be the annual savings needed to make the investment realize a 12% yield assuming that Para will not realize the residual value at the end of year 5?


30. What would be the annual savings needed to make the investment realize a 12% yield assuming that Para will not realize the residual value at the end of year 5 and that the marginal tax rate is at 30%?


35. What would be the annual savings needed to make the investment realize a 12% yield assuming that Para will realize the residual value at the end of year 5 (as a gain) and that the marginal tax rate is at 30%?



Jun 07, 2022
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