A water system is to be build to serve a newly developed subdivision.
This subdivision will use 300,00,000 liters of water per year. The facilities to be installed cost P1,500,000 and it is estimated that the operations and maintenance of the system will cost P70,000 annually.
Operating taxes will be P24,000 per year and income taxes will be 25% of the first P100,000.00 net revenue 35% of the net revenue over P100,000.00.
The life of the water system properties is 80 years ang 5% sinking fund is to be established for deprecation. at what rate per cu. meter must be the water be sold to return an annual net profit of 6% after income taxes on the original investment?