A firm is charged P200 per ton for hauling its raw materials by a trucking company. Forty tons per day are hauled for 300 days a year. It is desired to install a railway system which would bring down the cost of hauling to P6.60 per ton. Maintenance cost of this is P12,000 per month. Tax is 10%. Average rate if earning is 20%. If the company has the cash necessary for the installation, would you recommend the change? (use rate of return method)

A firm is charged P200 per ton for hauling its raw materials by a trucking company. Forty tons per day are hauled for 300 days a year. It is desired to install a railway system which would bring down the cost of hauling to P6.60 per ton. Maintenance cost of this is P12,000 per month. Tax is 10%. Average rate if earning is 20%. If the company has the cash necessary for the installation, would you recommend the change? (use rate of return method) O Not justified O Cannot be determined O No answer text provided. O Justified A firm is charged P200 per ton for hauling its raw materials by a trucking company. Forty tons per day are hauled for 300 days a year. It is desired to install a railway system which would bring down the cost of hauling to P6.60 per ton. Maintenance cost of this is P12,000 per month. Tax is 10%. Average rate if earning is 20%. If the company has the cash necessary for the installation, would you recommend the change? (use rate of return method) O Not justified O Cannot be determined O No answer text provided. O Justified