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(Last Updated On: March 27, 2019)

An Investment of P2,700,000 can be made in a project that will produce a uniform annual revenue of P1,850,400 for 5 years and then have a salvage value of 10% of the investment. Out-of-pocket costs for operation and maintenance will be P810,000 per year. Taxes and insurance will be 4% of the first cost per year. The company expects capital to earn 25% interest before income taxes. Is this a desirable investment? Use Rate of Return Method

Is this a desirable investment? Use Rate of Return Method
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