Engineering Board Exam Reviewer · Perpetuity and Capitalized Cost · medium
A machine costs P300,000 and requires P15,000 annual maintenance forever. Find its capitalized cost at 10% interest.
- P450,000
- P400,000
- P500,000
- P350,000
Answer
A. P450,000
Solution
CC=300000+15000/0.10=300000+150000=P450,000.
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