Twelve years ago, an industrial facility bought a boring machine for P65,000. The estimated life of this machine is 25 years and a depreciation reserve had been placed based on this. The price of the latest model is P125,000 and the facility owner wants to replace the machine with this latest model. The old unit can be sold for P18,000. How much new capital will be required for the purchase?
Twelve years ago, an industrial facility bought a boring machine for P65,000. The estimated life of this machine is 25 years and a depreciation reserve had been placed based on this. The price of the latest model is P125,000 and the facility owner wants to replace the machine with this latest model. The old unit can be sold for P18,000. How much new capital will be required for the purchase?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 2E
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Twelve years ago, an industrial facility bought a boring machine for P65,000. The estimated life of this machine is
25 years and a
the facility owner wants to replace the machine with this latest model. The old unit can be sold for P18,000. How
much new capital will be required for the purchase?
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