Engineering Board Exam Reviewer · Present Worth Analysis · easy
A machine costs P120,000, has annual operating costs of P15,000 for 6 years, and a salvage value of P20,000 at the end of year 6. Find the present worth of cost at 10% interest.
- P174,039.43
- P190,000
- P196,618.39
- P185,328.91
Answer
A. P174,039.43
Solution
PW=120,000+15,000(P/A,10%,6)-20,000(P/F,10%,6)=120,000+15,000(4.3553)-20,000(0.564474)=P174,039.43.
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