Question
A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of Php 500,000; maintenance costs that start at
A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of Php 500,000; maintenance costs that start at Php 50,000 at year one and increases by Php 10,000 for each of the next four years, and then remain constant for the following five years; savings of Php 200,000 per year; and a resale value of Php 350,000 at the end of study period. If the project has a 10-year life and the firm's MARR is 10% per year, determine the acceptability of this project using the following methods:
A. Annual Worth method
B. Conventional Payback method
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