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A firm has two alternatives for the improvement of its current production system. The data are as follows: Machine A Machine B First Cost P6M
A firm has two alternatives for the improvement of its current production system. The data are as follows:
Machine A Machine B
First Cost P6M First cost P6,518,622
Annual operating cost P250T Annual operating cost P263,207
Service life 4 years Service life 6 years
Salvage value P150T Salvage value P128,035
Using the Present Value (PV) Method and with the firms interest rate of 22% cpd. annually, what the PV of Machine B?
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