Suppose a businessman is considering the purchase of a business machine that is expected to be obsolete in five years. The machine is worth Php 100,000.00. The prevailing rate of interest is 15% per year. Suppose he made an estimate of his gross yearly income as follows:
Year
Income
1
Php 20,000.00
2
Php 25,000.00
3
Php 35,000.00
4
Php 30,000.00
5
Php 28,000.00
Is the business profitable? Why or why not?
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