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An existing machine in a factory has an annual maintenance cost of P140,000.A new and more efficient machine will require an investment of P290,000 and
An existing machine in a factory has an annual maintenance cost of P140,000.A new and more efficient machine will require an investment of P290,000 and is estimated to have a salvage value of P60,000 at the end of 8 years.Its annual expenses for maintenance and upkeep, etc. a total of P100,000.If the company expects to earn 12% on its investment, will it be worthwhile to purchase the new machine using the a) present worth method?b) rate-of-return method?
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